As many of you know, tomorrow the United States House of Representatives is voting on an infrastructur e bill. Tucked away in the mountains of pork is a provision to the IRC 6050. This would make participating in cryptocurrency, particularly decentralized finance, a criminal violation for many existing entities and users in the space.

Here is a modified version of the letter I sent to my local representative in support of striking the 6050I amendment from the infrastructure bill tomorrow. I highly encourage you guys to e-mail your representatives regarding this matter as it affects us all.

You can use the tool in the upper right hand corner to find your representative by zip code. house.gov

 

(The Date)

The Honorable (Representatives Name)

United States House of Representatives

 

Dear (Representative Insert Name),

I am writing this letter to request your support for the following issue that is of great importance to me. I have lived in your district/state for ______ years and vote regularly in elections. 

Currently there is an amendment on your desk that could make it near impossible to have an open free digital market. Tomorrow's Infrastructure bill contains an amendment to Section 6050I of the IRC. Under the 6050I amendment it will become a felony offense (up to 5 years in prison, $25k fine) for failure to collect the name, address, DOB, & Social Security number of the individual you are transacting with for all cryptocurrency transactions over $10,000.

Unlike all other IRS information reporting requirements, violations here are felonies. Second, it does not simply add a reporting burden to intermediaries already in the business of collecting and storing customer data, such as stock brokers or centralized cryptocurrency exchanges. It applies to all businesses -- which can include individuals. In fact, the only businesses that are exempt from section 6050I are banks and financial institutions.

The alleged purpose of this provision is to reduce criminal activity. However, that stands in stark opposition to the facts. Michele Korver, chief digital currency advisor to the director of FinCEN, recently shared in the Department of Justice Journal of Federal Law and Practice, “...as mainstream adoption of cryptocurrency has grown, the percentage of transactions used to promote or conceal crime has also decreased.” [1]

Regardless of the disputed merits of surveillance to stop or prevent criminal activity, these reporting requirements are often difficult or impossible to abide by in the context of bitcoin transactions. Pseudonymous by nature, Bitcoin is also permissionless, and peers in the network do not have the necessary information to provide the IRS and the FinCEN. And even if they did, the probable consequences of such addition to the bill could be harsh. The privacy and thus the security of regular Americans would be at risk.

In addition to this, the cryptocurrency industry promises growth, jobs, and security to millions of Americans moving forward, as it already does for many today. This is a growing industry with undisputable potential, growth, and promise. This technology has changed lives, and will continue to change lives for the better as we transition to a fully digital economy. 

A draconian response as laid out by this provision would cripple American cryptocurrency innovation. Innovation would not stop, rather America would experience an intellectual and economic exodus to foreign countries, some of whom are potential enemies on the global stage. 

Please remove "Digital asset" from Section 6050I. Don't cripple the decentralized tools your constituents use to counter inflation and a devalued dollar. Privacy is a right. Writing code can be included in freedom of speech.

I would greatly appreciate your consideration and support on this. They are extremely important to me and my family. Thank you for taking the time to read this letter.

 

Sincerely,

(Insert Name)

References:

[1] https://www.justice.gov/usao/page/file/1403671/download

 

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