Here’s the Latest on How U.S. Regulators Want to Crack Down on Crypto

Top U.S. lawmakers and regulators are taking steps to tighten their grasp on cryptocurrencies, or advocating for greater control over digital assets.

Here are the bills, speeches and charges issued by U.S. government representatives and agencies in the past week: 

  • Infrastructure Bill — Proposed on Aug. 1, a major infrastructure bill awaiting the Senate’s final vote has crypto implications. The bill defines a “broker” as an entity which “is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” With this definition, the bill categorizes proof-of-stake validators and DeFi developers as brokers obligated to file 1099 forms with the Internal Revenue Service (IRS) along with other requirements.
  • Amendment to Infrastructure Bill — Senators Ron Wyden, Pat Toomey and Cynthia Lummis have proposed an amendment to the bill above, which excludes validators, services which facilitate private key use, and several other categories of provider. The amendment has garnered broad support in the crypto community, which has urged people to call their Senators advocating for inclusion of the amendment in the bill.
  • Warner Portman Amendment — Senators Mark Warner and Rob Portman proposed a competing amendment to the infrastructure deal that excludes proof-of-work mining and sellers of hardware and software wallets, but wording suggests proof-of-stake validators and developers would be subject to expanded reporting and taxation. The White House formally backed the last-minute amendment.
  • SEC Chairman Speech — On Aug. 3, Chairman of the SEC Gary Gensler said “The American public is buying, selling and lending crypto on these trading, lending and DeFi platforms, and there are significant gaps in investor protection.” Gensler indicated that the assets traded on these platforms may be securities, in which case, the projects that launched them would need to register with the SEC and comply with its laws. 
  • SEC Charges  — On Aug. 6, the SEC charged two Florida men and their Cayman Islands-based crypto company for securities fraud. According to the press release, the company sold $30M in unregistered securities using smart contracts and “decentralized finance technology.” The company, Blockchain Credit Partners, sold mTokens from Feb. 2020 through Feb. 2021. These tokens paid 6.25% interest and DMG governance tokens.