What just happened with the infrastructure bill?

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Well, the US Senate is going to pass its infrastructure bill today. Despite a week of negotiations, the wording of the bill will be the widest possible version. There’s a bit of a regulatory whiplash going on.

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Chaos in Congress

The narrator

And after all that, the bill the Senate will pass is exactly the same version we saw a week ago.

Okay, if you’re a reader of this newsletter you’ve probably been keeping up with what’s going on in DC I’ll throw some links below if you need to catch up but in short the Senate is going to vote on it. $ 1,000 billion infrastructure bill with the original crypto tax reporting provision that was introduced on August 1. Two edits and a Hail Mary effort were blocked for non-cryptographic reasons.

Why is this important

Congress is definitely no longer ignoring crypto. Juries still don’t know what this means.

Break it

So last week was a trip. At one point, a $ 1,000 billion mandatory infrastructure bill was in limbo, in part because of crypto. And on Sunday night, after all the time and energy invested in changing the crypto reporting provision, we saw the Senate vote to simply pass the bill as originally introduced a week ago, for reasons that had nothing to do with the crypto layout.

Less than a day later, we saw a last-minute effort to add a bipartisan compromise fail because a senator wanted to add an amendment to military spending.

I wrote last week that the crypto provision of the infrastructure bill was a sign that lawmakers in Washington believed crypto would be an integral part of America’s financial or tech ecosystem. The last few weeks of lobbying and action have greatly strengthened my observation.

We have seen two different bipartisan groups of senators submit amendments to the original draft to narrow the scope of the broker term before those groups come together to come up with a compromise that satisfies all relevant lawmakers, the US Treasury Department, and industry groups.

A handful of newspaper articles, such as in Politico, The Washington Post, The New York Times, and Vox, seemed to emphasize this point.

Based on my Twitter feed, it was also likely that lobbyists and think tanks would enjoy greater support, as well as greater public awareness from the insanely online group of users and supporters of cryptography.

Now all eyes are on the House of Representatives. There is already bipartisan support for amending the bill, but the question is how. Any changes will have to be reconciled with the Senate version, which means that if there is a substantial difference in payments, House lawmakers will have to find a way to fill that hole.

In the coming weeks, I can imagine learning more about what the House can do and what the non-crypto considerations are. But in the meantime, here’s a little reminder of how we got there:

July 28: Draft Infrastructure Bill expands the definition of a broker for crypto tax reporting purposes, explicitly including decentralized exchanges. 1: The final draft text removes the part of decentralized exchanges but also maintains a fairly broad definition of the broker. 3: Senator Rob Portman (R-Ohio), who inserted the provision, defends it on Twitter.Aug. 4: The senses. Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.) And Pat Toomey (R-Pa.) Propose an amendment exempting what they consider to be non-brokerage entities. 5: Portman announces its support for the reduction of the provision before proposing a lesser exemption with Sens. Mark Warner (D-Va.) And Kyrsten Sinema (D-Ariz.) 6: The Washington Post reports that Treasury Secretary Janet Yellen pressured Wyden to drop his amendment. 7: The Senate resumes consideration of the bill. 7: Warner and Sinema update their proposed change to also add Proof of Stake Node Validators to the aforementioned Proof of Work minors. 8: The Senate voted to move the bill forward without considering any amendments. I figured this was in part due to Senator Bill Hagerty (R-Tenn.) Opposing a fast-track schedule. 9: Toomey, Portman, Sinema, Warner and Lummis find a compromise between the two competing amendments and seek unanimous consent to add it to the bill. Senator Richard Shelby (R-Ala.) Opposes it, which means that the amendment is not carried and returns to the basic text which was introduced eight days ago.

More to come on this story.

Define DeFi

A lot has happened in the past week. SEC Chairman Gary Gensler gave a speech on DeFi and the regulator then brought two enforcement actions that appear to be setting up additional work on DeFi.

It could actually be a bigger signal than what the Senates are doing. The infrastructure bill, even if passed, will not take effect until a year later. The Securities and Exchange Commission is now gearing up in what certainly looks like an effort to claim DeFi regulation.

So far, the two actions we have seen have been with centralized entities. On Friday, the SEC announced charges against DeFi Money Market, which does not appear to be something decentralized, but was still described as a decentralized financial lender in an SEC press release.

The statement said the case concerns the first agencies involving titles using DeFi technology.

Yesterday, the SEC settled with Poloniex, which was briefly a subsidiary of Circle. Gabriel Shapiro, general counsel at Delphi Labs, tweeted that it appears the SEC is trying to set a precedent for more decentralized exchanges, as is Collins Belton, managing partner at Brookwood PC

In other words: there will be absolutely more cases, and over time those cases will shift from centralized trading platforms masquerading as decentralized platforms to ones that are more DEX-like.

In a statement released alongside the Circle Regulation, SEC Commissioner Hester Peirce also noted that it was still not clear which cryptocurrencies on the exchange were securities, a key question for other exchanges operating. in the USA.

Bidens rule

Changing of the guard

Legend: (name.) = Candidate, (rum.) = Rumor, (act.) = Interim, (inc.) = Incumbent (no replacement planned)

The Biden administration is now considering Cornell University law professor Saule Omarova as the potential head of the Office of the Comptroller of the Currency, which is currently headed by Acting Comptroller Michael Hsu, according to the New York Times. In addition, Michael Mosier, Interim Director of FinCEN, has resigned and has been replaced by Himamauli Him Das.

Somewhere else:

Outside of CoinDesk:

(Intergovernmental Panel on Climate Change) The IPCC, a United Nations group, has released a report concluding that global climate change is inevitable over the next three decades. Nations can still take action to try to mitigate the severity of the impact, but there will be a global 1.5 ° C rise in the decades to come, with all the side effects that will entail.

If you have any ideas or questions on what I should discuss next week or any other comments you would like to share, please feel free to email me at [email protected] or find me on Twitter @nikhileshde.

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