Sam Bankman-Fried breaks down how the crypto tax provision in the infrastructure bill could force swaths of the industry out of the US

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  • Sam Bankman-Fried said the latest updates to the crypto tax provision in the infrastructure bill could push the market offshore.
  • The FTX exchange founder tweeted that the latest amendment could require proof of stake miners to report transaction information.
  • He said POS miners won’t be able to comply, and would therefore likely move their businesses out of the US.
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Sam Bankman-Fried said the latest updates to the cryptocurrency tax provision within Washington’s infrastructure bill could push swaths of the industry offshore.

In a Twitter thread Friday morning, the cryptocurrency billionaire and founder and CEO of FTX exchange said that the latest amendment proposed by Sens. Mark Warner of Virginia, Rob Portman of Ohio and Kyrsten Sinema of Arizona is “odd.”

The amendment clarifies that the tax reporting requirements will not apply to blockchains that use proof-of-work chains, but according to Bankman-Fried, the “explicit exemption of POW creates an implication that proof-of-stake chains would trigger requirements.”

One blockchain that would likely fall under that is Ethereum, as it will soon transition to a POS chain.

Bankman-Fried explained that proof of stake miners aren’t in the exchange businesses and don’t have have private customer or trade information, therefore they wouldn’t be able to comply with the reporting requirements.

“So their choices, basically, would be a) shut down [or ] b) move out of of the US,” he said.

“They couldn’t choose to comply even if they wanted to. So the impact would just be to force crypto infrastructure and innovation offshore,” Bankman-Fried added.

Earlier in the week, a separate trio of Senators proposed an amendment to the bill that would exclude crypto miners and software developers from the bill’s tax-reporting rules.

Bankman-Fried said that the tax proposal with the prior amendment was a “positive, constructive regulation that would help enforce tax reporting.” He also said his cryptocurrency exchange FTX would be happy to comply with the tax reporting requirements in the bill.

But the new amendment doesn’t just call upon exchanges like FTX to report transactions, but could potentially loop in proof of stake miners that wouldn’t be able to comply.

https://markets.businessinsider.com/news/currencies/sam-bankman-fried-crypto-tax-provision-industry-offshore-infrastructure-bill-2021-8

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