Crypto Frontline

US$1.2-T Infrastructure Bill Aims Crypto Transaction Transparency

US$1.2-T Infrastructure Bill Aims Crypto Transaction Transparency
November 17
13:48 2021

The US$1.2-trillion bipartisan infrastructure bill targets cryptocurrency transaction transparency. President Joseph Robinette Biden, Jr. signed this bill into law yesterday, Monday, November 15.

We want to share this very important cryptocurrency-related news with our readers. We believe the US$1.2-trillion bipartisan infrastructure bill, which is now a law, will affect them, especially if they are cryptocurrency exchange operators or investors based in the United States.

Based on the report posted online by digital news outlet Yahoo! UK, the US$1.2-trillion bipartisan infrastructure bill consists of a controversial cryptocurrency broker or cryptocurrency exchange reporting requirement. This virtual currency tax reporting stipulation seeks to expand the definition of a cryptocurrency broker or exchange for the US Internal Revenue Service (IRS) purposes.

The US$1.2-trillion bipartisan infrastructure bill requires all virtual currency exchanges or brokers to report transactions to the IRS under the present tax code. This necessity requires cryptocurrency exchanges to issue a 1099-B document.

According to the news posted online by news magazine and news website Time, these entities will have to notify the IRS directly of cryptocurrency transactions. The US$1.2-trillion bipartisan infrastructure bill contains another provision relating to the cryptocurrency industry.

This stipulation essentially requires recipients of transactions worth more than US$1,000 to verify the sender’s personal details, record his Social Security number, the transaction’s nature, and other information. This provision of the US$1.2-trillion bipartisan infrastructure bill also mandates the recipients to report the transaction to the government within 15 days.

These provisions of the new law involve the IRS promoting cryptocurrency transaction transparency, tracking vital data to prevent tax avoidance and illicit virtual currency transaction gains. We support US President Joseph Biden, Jr.’s signing of the US$1.2-trillion bipartisan infrastructure bill into law.

This measure aims to safeguard the American public in their daily transactions, including cryptocurrency transactions. We gathered that before this event, some cryptocurrency industry proponents felt concerned, thinking that the bill includes broad requirements and capturing entities such as cryptocurrency miners and other parties that do not actually facilitate virtual currency transactions.

Moreover, legal representatives of some of the virtual currency industry proponents argued that it would be almost impossible to comply with the US$1.2-trillion bipartisan infrastructure bill once it becomes a law. They reasoned that this scenario might be the reality when applying the rules to cryptocurrencies and other virtual assets such as non-fungible tokens or NFTs.

Nevertheless, we encourage our readers, who are cryptocurrency exchange operators and investors, to comply with the stipulations of the US$1.2-trillion bipartisan infrastructure bill that is now legislation. We suggest tapping the services of cryptocurrency-knowledgeable tax professionals.

These specialists can aid cryptocurrency exchanges and investors in accurately reporting their virtual currency-related transactions and investments, upholding transparency as much as possible. 

By performing these steps, we believe brokers and investors can aid cryptocurrencies’ seamless entry into the mainstream financial system and these virtual assets’ achievement of full legitimacy. Plus, we think, through the US$1.2-trillion bipartisan infrastructure bill that is now a law, illegal activities in the cryptocurrency industry can eventually be fully eliminated.

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