Allyson Versprille
Crypto miners and staking-service providers may learn in the days ahead if they’re excluded from a proposal requiring digital-asset brokers to turn over information on their clients’ transactions.
The subset of the crypto industry — which includes companies like Lido and Digital Currency Group’s Foundry — is hoping it will be spared by the rule, which the White House finished reviewing Thursday.
The proposal is expected to provide further detail on a 2021 law that requires cryptocurrency brokers to collect and disclose detailed information on customers including names, addresses, gross proceeds from sales, and capital gains and losses. The requirements are similar to those that already apply to stock and bond brokers. However, miners and those who lock up tokens on certain blockchains to earn income — known as stakers — say access to such information is difficult, if not impossible to obtain.
“As a miner, we’re guardedly optimistic about the content of the final version, placing the accountability where it makes sense,” said Matthew Schultz, executive chairman at crypto-mining company CleanSpark. “We’re proponents of appropriate regulation in the digital currency space, as we believe it will drive the continued adoption of Bitcoin.”
Miners and stakers were initially worried that the new reporting requirements could apply to them because of how broadly the law was written — a concern shared by several lawmakers.
The US Treasury Department told a group of senators in a last year that “ancillary parties who cannot get access to information that is useful to the IRS” could avoid the rules. But after a brutal series of setbacks over the last several months, crypto advocates are guarded. The guidance will offer insight into the IRS and Treasury’s latest thinking about the industry.
The rules could have major consequences for the multibillion dollar Bitcoin-mining industry and over $42 billion in staked assets. After the IRS and Treasury release the proposed regulations, the public will get an opportunity to submit comments. The government will then put out a final version taking into account that feedback.
