The U.S. Treasury Department must provide additional clarity to America’s innovators and entrepreneurs in forthcoming guidance on the new digital asset reporting requirements, according to U.S. Rep. Tom Emmer (R-MN) and 10 of his colleagues, who touted their bipartisan bill as a guide help the department.
The lawmakers are concerned that the Section 80603 reporting requirements included in the Infrastructure Investment and Jobs Act law that are being imposed on digital asset market participants “are incompatible with the technology’s operation and the privacy rights of users,” according to a Jan. 26 letter they sent to Treasury Secretary Janet Yellen.
“As the department develops rules and guidance for compliance with this section, we believe that additional clarity is necessary for certain market participants,” they wrote. “We ask that you look to the bipartisan bill, H.R. 6006, the Keep Innovation in America Act, to ensure that any future guidance provides the necessary clarity to the digital asset ecosystem.”
Rep. Emmer in November 2021 signed on as an original cosponsor of H.R. 6006 with bill sponsor U.S. Rep. Patrick McHenry (R-NC) and eight other original cosponsors, including U.S. Reps. Anthony Gonzalez (R-OH) and Tim Ryan (D-OH), to provide reporting requirements for digital assets, among other provisions. The bill remains under consideration in the U.S. House Ways and Means Committee.
“As nascent financial technologies develop, we must ensure requirements imposed on the digital asset ecosystem are both crafted and implemented in such a way to ensure the United States remains at the forefront of financial innovation,” the lawmakers wrote. “We believe consistent information reporting on digital asset transactions is necessary. However, it should not prevent these technologies and the ecosystem from continuing to flourish due to unclear regulations that only create uncertainty.”
For instance, Rep. Emmer and his colleagues pointed out that Section 80603 is ambiguous because it gives the Treasury Department the ability to interpret who within the digital asset ecosystem qualifies as a “broker.”
“This subjective interpretation has the potential to reach those beyond the intent of Congress,” according to their letter.
To help constrain “a potentially expansive reading” of the broker definition, they pointed Yellen to the definition provided in the proposed H.R. 6006, which they wrote more narrowly specifies the information that is intended to be captured by a broker when transferring a digital asset to an account maintained by a non-broker.
“Overhasty application of these requirements risks the creation of an unlevel playing field for transactions in digital assets and those required to provide them,” the lawmakers wrote.