Two groups of senators say they are nearing a last-minute deal on crypto oversight, but an agreement may come too late to get added to the infrastructure bill

- Senators say they are nearing last-minute crypto compromise — The amendment may not get called up for a vote in Senate

Bloomberg 2021-08-09

Context & Ripple Effects

The immediate question is procedural rather than whether senators can find common ground: related coverage shows a bipartisan compromise on cryptocurrency reporting was reached, while the larger infrastructure bill moved forward with the disputed provision still intact. That makes floor timing decisive for the scope of crypto reporting rules.

Later Senate crypto efforts follow the same pattern: an expected delay to market-structure legislation and postponed Clarity Act votes show how broader legislative priorities can repeatedly displace crypto policy.

First-order effects

The Senate’s crypto compromise risks having no effect on the infrastructure bill if leaders do not call the amendment for a vote, leaving the bill’s contested reporting provision in place as it advances.
Crypto businesses and transaction intermediaries face the prospect of reporting obligations shaped by the broader provision rather than the senators’ negotiated revision.

Second-order effects

A missed amendment vote shifts the fight from drafting a bipartisan fix to challenging or revisiting the enacted provision through subsequent legislation, prolonging uncertainty over who falls within its reporting scope.
The episode gives future crypto bills a procedural lesson: cross-party agreement is insufficient without a viable path to floor time, a constraint visible again in later delayed Senate measures.

Third-order effects

Repeated last-minute bargains and delayed votes point to a US crypto-policy process in which major must-pass bills and Senate scheduling can determine regulatory outcomes as much as substantive consensus.
If that pattern persists, crypto oversight will be assembled through successive, narrow legislative openings rather than a single predictable market-wide framework.

The trend: US crypto regulation is being shaped by Senate timing and legislative vehicles as much as by bipartisan agreement on the underlying rules.

Discussion

Vox Maryam Gamar on x
How two competing cryptocurrency policies began a conversation on digital rights
@brian_armstrong Brian Armstrong on x
1/ There are a few key moments that define our future. One is happening now in the Senate w/ the infrastructure bill. At the 11th hour @MarkWarner has proposed an amendment that would decide which foundational technologies are OK and which are not in crypto. This is disastrous.
@jerrybrito Jerry Brito on x
Senator Warner has revised his amendment yet again. He now excludes proof-of-work and proof-of-stake, but not any other consensus mechanism. I am speechless. Now they're picking 2 winners? There are other consensus mechanisms! Why do this? https://twitter.com/...
@tedcruz Ted Cruz on x
🚨Crypto got screwed tonight.🚨 There's a partisan disagreement on spending, so Dems objected to ALL further amendments. That means NO vote on Wyden-Lummis to lessen the damage this bill will do to crypto, & NO vote on the Cruz amd. to repeal the new crypto rules altogether.
@elonmusk Elon Musk on x
@brian_armstrong @MarkWarner Agreed, this is not the time to pick technology winners or losers in cryptocurrency technology. There is no crisis that compels hasty legislation.
@nikhileshde Nikhilesh De on x
I've been getting qs so here's what I know: As of 5:15pm ET, literally anything seems possible re: crypto tax reporting provision. Might see votes on amendments, might not, might see a compromise, might see the Senate just move to vote on the current bill without any amendments.
@igorbobic Igor Bobic on x
It is both amusing and sort of ridiculous how the Senate stumbled into a very technical and complicated debate about crypto mining while working on an infrastructure bill.
@jakesherman Jake Sherman on x
Quick thought before this senate vote series: crypto is only going to become more scrutinized by congress. This is the beginning. Congress is late to it, no doubt, but this will be a bigger focus in the future.
@jstein_wapo Jeff Stein on x
Worth noting that even if we get a Wyden-Warner-WH crypto agreement it may not wind up in the bill bc there may not be amendments allowed, for complicated Senate procedural reasons @TonyRomm has explained to me but that I am too dense to understand
@jhweissmann Jordan Weissmann on x
Ban Senators from owning individual stocks or crypto, for the love of God. https://www.politico.com/... https://twitter.com/...
@fightfortheftr @fightfortheftr on x
Together we've driven more than 35,000 calls to Senators saying #DontKillCrypto. We're not even keeping track of tweets and emails. It's unacceptable for elected officials to ignore their constituents. Keep calling. Keep tweeting. Make them listen. https://www.fightforthefuture.o…
@tedcruz Ted Cruz on x
The result? The Senate's going to inflict billions of dollars of damage on the growing & exciting crypto industry & drive much of it overseas. There aren't 5 Senators who understand much of anything about crypto.
@tedcruz Ted Cruz on x
What the Senate said tonight: Let's tax the hell out of something we know nothing about, so we can pass a giant bill we haven't read, and spend the American people's money on stuff we can't afford. It's reckless & harmful.
@mg Matt Galligan.eth on x
What are the motivations behind picking technologies to build into this amendment? It's like Congress coming out and saying you can code with Java + Python but leaving all other languages out. https://twitter.com/...
@iohk_charles Charles Hoskinson on x
There you have it folks. Chuck Schumer fucked us all. It's one thing to disagree, but he didn't even let the senators vote. Time to move on to the house. 435 congress critters. Let's light up the phones https://twitter.com/...
@hackingbutlegal Jackie Singh on x
This is the first real fight for the regulation of cryptocurrency at a federal level. Here's a good overview of what is happening: https://www.washingtonpost.com/ ...
@eric_lombrozo @eric_lombrozo on x
Nah, the Senate got screwed. The bill made clear just how incompetent and dysfunctional the institution is and got lots of incredibly determined and passionate activists from around the whole world riled up. And the Honeybadger still don't daf. https://twitter.com/... https://twi…
@mdudas Mike Dudas on x
“The Treasury Department had been involved in the drafting of the latest amendment” https://www.bloomberg.com/...
@ivanthek @ivanthek on x
Every member of Congress should immediately disclose their interest in cryptocurrencies and adjacent businesses. https://www.washingtonpost.com/ ...
@nickcini Nick Mancini on x
I cannot believe the year is 2021 and instead of Congress actually debating life changing societal remedies they are bickering over the difference between $10 billion in #crypto taxes per year. I was a fan of the Biden administration, but respect is quickly being lost. https://tw…
@el33th4xor Emin Gün Sirer on x
The Senate is giving us a picture perfect lesson on why politicians cannot be trusted to “regulate” technological innovation. https://twitter.com/...
@jhweissmann @jhweissmann on x
Ah. Honestly, reasonable result. Just means there's gonna be vague-ish statutory language and lots of lobbying during the Treasury rule-making process. https://twitter.com/...
@novogratz Mike Novogratz on x
I don't often agree with @tedcruz but he is pretty spot on. Crypto started as a movement of people who didn't trust government and centralized authority. The embarrassing actions of our Senators and the White House reinforces this lack of trust. Shameful. https://twitter.com/...
@milessuter Miles Suter on x
It's *so* crazy that this is how legislation is made in DC. These are incredibly complex, technical and impactful issues. They deserve thorough contemplation, debate & public discussion in order to ensure the policy put in place optimizes future American prosperity & innovation
@tonyromm Tony Romm on x
pessimism about amendments notwithstanding, this Senate bill — with or without crypto provisions that some dislike — is likely to see some changing in the house anyways.
@iampaulgrewal Paul Grewal on x
Each and every United States Senator should be clear: the millions of Americans who buy, sell, use and care about crypto are staring at this amendment fiasco in disbelief. We vote, donate, canvass and knock on doors. We remember when leaders do their jobs— and when they don't.
@caitlinlong_ @caitlinlong_ on x
Yep & we've proven our power doesn't stem from lobbying money. Our power= there are ~50 million of us (in every Congressional district), we can self-organize fast when we want to & we're not afraid to call out bad DC policy that doesn't understand our tech https://www.washingtonp…
@josephzeballos Joseph Zeballos-Roig on x
Caught up w/Toomey on crypto talks, some issues remain unresolved: “Someone in the business of running a centralized exchange should be required to report transactions for their customers.. but we should not rope in people who are not actually running a centralized exchange”
@jack Jack⚡️ on x
If we can't strike the entire provision so we can have proper hearings and deliberation, then let's simplify the definition of broker to what really matters: where digital assets are exchanged for fiat currency. Broker = Fiat-to-Crypto Exchange.
@josephzeballos Joseph Zeballos-Roig on x
Spoke w/Wyden about ongoing crypto tax talks: “I continue to feel very strongly I want to crack down on tax cheats and people associated with these centralized programs, crypto exchanges.. I just don't want to destroy the innovation that comes from a decentralized network”
@jstein_wapo Jeff Stein on x
.@mcuban tells The Washington Post on current crypto debate: “Shutting off this growth engine would be the equivalent of stopping e-commerce in 1995 because people were afraid of credit card fraud” Story w/ @tcfrankel @JaxAlemany @hshaban https://www.washingtonpost.com/ ...
@gladstein Alex Gladstein on x
“An intense infrastructure bill brawl between Bitcoin advocates, Congress and the White House has revealed a new power player in Washington that's starting to find its footing: the cryptocurrency lobby” In retrospect, it was inevitable. https://www.politico.com/...
@kmsmithdc Kristin Smith on x
1/ Dear Senators, still confused about why the @markwarner amendments (yes, all 5 of them) fall short of fixing the #crypto provision in the #infrastructurebill? Here are 3 things you need to know.
@jack Jack⚡️ on x
Forcing reporting rules on Americans who develop software and hardware, who mine and secure the network, or who run nodes to build resilience and efficiencies, is an impossible ask that will only drive development and operation of this critical technology outside the US.
@cperruna Chris Perruna on x
The question is no longer: “Is crypto a fad?” It's now a question of: How do we incorporate, tax and regulate this growing and important industry? https://twitter.com/...
@hshaban Hamza Shaban on x
On today's front page w/@tcfrankel, @JStein_WaPo & @JaxAlemany. In the contest over the infrastructure bill, the crypto industry and its allies sprung into action, mounting a campaign on Capitol Hill, and proving their newfound power as a lobbying force https://www.washingtonpost…
@jack Jack⚡️ on x
If you feel this doesn't go far enough, I'd argue that this at least gets you to 90% of goal. For the remaining 10% of edge cases, let's make a proper well-informed law through committee hearings with witnesses on both sides of the debate.
@reid_yager Reid Yager on x
“Any industry wants to be involved in regulation discussions,” said @Reid_Yager, a former lobbyist and current director of communications at @BlokhausLLC, a blockchain marketing firm. “But explaining all this to a septuagenarian lawmaker is a huge challenge.” https://twitter.com/…
@jack Jack⚡️ on x
To @RonWyden, @SenLummis, @SenToomey, @MarkWarner, @SenRobPortman, @SenatorSinema, @TedCruz, respective staff & everyone who's worked on the Infrastructure Bill “Crypto Tax Reporting” provision: thank you for your work to get this right. May we offer a workable simplification?
@avichal Avichal Garg on x
~20% of US Millennials own crypto. Only 37% own stocks. Imagine Senators and the White House trying to kill the stock market for half of all Millennial shareholders. How do you think that demo would vote in the next election cycle?
@techwontsaveus @techwontsaveus on x
An alliance between digital rights groups and powerful corporate interests held up the US infrastructure deal to minimize crypto regulations. “The parallels between cryptocurrency's current battle and how ‘Big Tech’ once approached regulation are notable."https://www.washingtonpo…
@aaschapiro Avi Asher-Schapiro on x
What do Trump staffer Mick Mulvaney, the lefty group Fight for the Future, & Mark Cuban have in common? A fight over a provision tucked into the infrastructure bill revealed an unlikely crew united by skepticism of cryptocurrency regulation. https://www.washingtonpost.com/ ...
@jasonklau Jason Lau on x
@josephzeballos As one of these “centralized exchanges” - we are already regulated and report transactions to the IRS. US users get sent 1099s.
@parismarx Paris Marx on x
The effort to stop this crypto amendment has been a good example of how tech and its supporters wield false narratives that sound attractive and empowering, but actually function to protect corporate power and fight regulations that would constrain it. https://twitter.com/...
@moneyball Steve Lee on x
This would be infinitely more effective for the IRS to collect taxes and the government to legitimately score revenue for the infrastructure bill. As it stands, no one running a node can comply with filing 1099s, so there would be no additional tax revenue due to this law. https:…
@gregmike Greg Mike on x
Nice background 👊 https://twitter.com/...
@avifelman Avi Felman on x
Genuinely the most bullish thing I've ever read https://twitter.com/... https://twitter.com/...
@brockm Mike Brock on x
... or, I have an idea: why not raise the stakes on individuals who do not report crypto gains by substantially increasing penalties? This seems like a better idea than trying to impose solutions that will literally be impossible to comply with.
@kmsmithdc Kristin Smith on x
END/ So.... we urge you to support the @ronwyden-@senlummis-@sentoomey amendment and oppose the @markwarner amendment. Keep crypto innovation here in the US. Crypto. Here for Good. (I promise you it really is.)
@kmsmithdc Kristin Smith on x
10/ This type of policy shouldn't be rushed or forced into must-pass legislation. We'd love to start back at square one... but instead we find ourselves here.
@arrington @arrington on x
I love how senators just have to say “let's fuck this random stuff up” and then all the people in that industry pour money into their coffers to convince them not to. It's a direct analogy to “nice store you have here, what a shame if something bad were to happen to it”
@tyler Tyler Winklevoss on x
The crypto voting block is real. We are no longer a fringe community of technologists, but a rapidly growing industry of millions of people that is fast becoming a major growth engine of the US economy, and will be for decades to come. https://www.washingtonpost.com/ ...
@apompliano Pomp on x
There are tens of millions of people around the world voluntarily working together to build a better future that stands on the bedrock of freedom and transparency. https://www.washingtonpost.com/ ...
@carnage4life Dare Obasanjo on x
The NRA has a chokehold on gun control regulation with about $3M-$5M in lobbying. The top 5 defense contractors spend about $50M/year to direct trillions in defense spending. The crypto community has the wealth & passion to have similar impact on government. The dragon is awake. …
@carnage4life Dare Obasanjo on x
US politicians have grabbed a tiger by the tail. The crypto community spends millions on JPGs and will have no qualms spending significant amounts of money going after politicians for effectively trying to ban crypto. At least one major politician has already figured that out. ht…

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