Key Takeaways
- A pending crypto infrastructure bill in the United States could impact DeFi services, according to a law expert.
- The bill, passed by Senate in August, initially raised concerns for centralized crypto exchanges and brokerages.
- It remains to be seen how heavily the bill will be enforced if it passes through the next stage of approval.
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One of two pending infrastructure bills in the U.S. could have implications for DeFi exchanges and other services, according to a warning from University of Virginia law lecturer Abraham Sutherland.
Infrastructure Bill Could Impact DeFi
In August, the U.S. Senate voted to pass an infrastructure bill that included provisions to increase transaction reporting requirements for crypto brokerages. While most of the discussion at that time focused on implications for centralized crypto exchanges such as Coinbase and Binance, the bill may have implications for DeFi services that were overlooked.
Sutherland drew attention to an amendment to tax code section 6050I, which he noted is different from the “so-called ‘broker’ provision that attracted public opposition.” Rather, Sutherland says that this amendment to the tax code would require recipients of “digital assets” in value amounts greater than $10,000 to report sender names, addresses, and SSNs to the government upon receiving the funds.
He explained that this provision requires recipients to collect information about senders—not information about recipients, as was previously the concern. Furthermore, this applies to all businesses, as only banks and financial institutions are exempt.
Sutherland believes that this rule could be especially challenging to DeFi platforms and services. Not only are DeFi platforms anonymous, DeFi users often receive funds from a liquidity pool or smart contract, meaning there is no single sender to identify.
“The statute would not ban DeFi outright [but] given the way DeFi works [this] would make…
