Not Reporting Info on Some Transaction Partners Could Soon Be a Felony - Ep.284
Unchained
Exploring the Tension Between Financial Reporting and Privacy Rights
This chapter explores the recent governmental mandates for financial transaction reporting and their impact on privacy rights. It contextualizes these measures alongside historical legislation while scrutinizing their underlying motivations and potential conflicts with the Fourth Amendment.
Remember the $1 trillion infrastructure bill, which caused considerable backlash from the crypto community due to the language regarding “brokers?” Abe Sutherland, an adjunct professor at University of Virginia School of Law, believes another provision tucked inside the bill could end up being a far more significant issue for anyone transacting in digital assets. Show highlights:
- how Abe fell down the crypto rabbit hole
- what provision 6050I is and how it could affect anyone transacting with digital assets
- how 6050I works and when it would apply
- why violating 6050I would be a felony
- how 6050I discourages digital asset transactions
- how 6050I would apply to different transaction types, like peer-to-peer trades, NFT sales, and smart contract escrow accounts
- what information recipients of digital assets must verify from the sender
- how the government came up with the $10,000 reporting threshold and why Abe believes this number is outdated
- why Abe thinks proposing 6050I within the infrastructure bill is inappropriate
- what reasons the government has to want to put such stringent reporting requirements on digital asset transactions
- how 6050I fits under the financial laws of the Bank Secrecy Act
- why Abe believes the amendment should be struck from the infrastructure bill
- what Abe thinks of the constitutionality of 6050I
- how Abe views 6050I as less about generating tax revenue and more about tracking people’s digital asset transactions
- what action steps he says the crypto community can take to fix the bill
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Episode links
Abe Sutherland
Information on 6050I
- Abe’s research report
- https://www.proofofstakealliance.org/wp-content/uploads/2021/10/Research-Report-on-Tax-Code-6050I-and-Digital-Assets-printable.pdf
- Tweet thread from Abe
- https://twitter.com/abesutherland/status/1438881314871156736
- https://twitter.com/abesutherland/status/1443082205383696384
- 6050I article Abe wrote for Bitcoin Magazine
- https://bitcoinmagazine.com/business/the-proposal-to-regulate-digital-asset-transactions-should-be-struck
- Abe’s appearance on What Bitcoin Did to discuss 6050I
- https://www.whatbitcoindid.com/podcast/hidden-danger-in-the-infrastructure-bill
- Twitter spaces with Congressman Warren Davidson, Peter McCormack, and others regarding the infrastructure bill
- https://www.youtube.com/watch?v=lCq6BVLzF44
- Miscellaneous 6050I links
- https://www.marketwatch.com/story/the-crypto-industry-could-take-tax-fight-all-the-way-to-the-supreme-court-11632509009
- https://www.breitbart.com/politics/2021/09/29/infrastructure-bills-crypto-surveillance-criticized-unconstitutional/
- https://fortune.com/2021/09/21/crypto-transactions-report-to-government/
- https://www.coindesk.com/policy/2021/09/17/crypto-lobbying-group-warns-of-another-tax-provision-in-senate-infrastructure-bill
- https://www.coincenter.org/an-unworkable-and-arguably-unconstitutional-tax-change-tucked-away-in-the-infrastructure-bill/
- https://decrypt.co/81236/overlooked-part-senate-infrastructure-bill-renews-worries-crypto-lobby
- https://nickanthony.substack.com/p/last-minute-cryptocurrency-taxation
- https://www.cato.org/blog/infrastructure-bill-hangs-balance-so-does-crypto
- https://ambcrypto.com/what-is-the-u-s-infra-bill-crypto-amendment-really-all-about
Unchained coverage of the infrastructure bill
- How Congress Might Pass Laws Bad for Proof-of-Stake and DeFi
- https://unchainedpodcast.com/how-congress-might-pass-laws-bad-for-proof-of-stake-and-defi/
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