Coinbase CEO Brian Armstrong says the proposed crypto tax rule doesn’t make sense


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Coinbase CEO Brian Armstrong is the latest crypto figure to speak out against the wording of proposed changes to the taxation of cryptocurrencies in the United States.

Tweet On Wednesday, Armstrong stated that the provisions contained in the proposal to tax cryptocurrencies have “profound negative effects” on the US crypto space and could force digital innovations to relocate overseas.

As Cointelegraph previously reported, changes to crypto taxation rules were a last-minute addition to the $ 1 trillion infrastructure deal currently before the U.S. Senate.

Like many other opponents of the proposal, the Coinbase CEO criticized the broad formulation of the bill. According to Armstrong, the bill extends the definition of “broker” to anyone who enables the transfer of digital assets.

In fact, this broad definition has seen several critics of the bill stating that non-crypto brokerage firms like miners and software developers could face burdensome tax obligations.

“That doesn’t make sense,” tweeted Armstrong, referring to the broad broker definition in the bill, adding, “Smart contracts, for example, are not companies and cannot be modified to collect KYC information or issue 1099s. They are simply software that runs on the blockchain and that anyone can use. “

Coinbase CEO stated that policy makers have a responsibility not to impede innovation in America. In early August, Galaxy Digital CEO Mike Novogratz angered politicians and regulators in the US for failing to do their crypto homework before enacting laws and regulations.

Related: Mike Novogratz beats up US officials for poor understanding of the crypto industry

Armstrong urged U.S. cryptocurrency advocates to stand behind the changes proposed by pro-cryptocurrency senators like Ron Wyden, Patrick Toomey, and Cynthia Lummis, and to call for a narrower definition of cryptocurrency intermediaries.

Before Senator Toomey proposed the change, he had previously called for miners and software developers to be exempted from crypto tax reporting requirements set out in the bill.

Armstrong also joined the chorus of crypto advocates who urged Americans to contact their elected officials to push for the above changes.