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Senator Cynthia Lummis joins the Yahoo Finance Live panel to discuss the new crypto amendment.
ZACK GUZMAN: Well, there is a scramble underway among those who understand crypto to clarify the piece of that infrastructure bill that plans to tax crypto brokers to bring in nearly $30 billion in revenue. The problem there, though, stems from a broad definition in the language included in the bill of broker that expands well beyond traditional exchanges and includes entities that would have no way to comply with that legislation.
A bipartisan team of Senate Finance Chair Ron Wyden and Republican Senator Cynthia Lummis and Pat Toomey, though, are pushing to rectify that with an amendment that includes language that would clarify the definition of a broker. And Yahoo Finance's Jessica Smith and I caught up with Senator Lummis about that new amendment and the prospect she says it has of passing the Senate. Take a listen.
CYNTHIA LUMMIS: We wanted to first exempt peer-to-peer transactions, decentralized transactions from this IRS reporting requirement and then just include the centralized transactions. Well, that then created additional issues for other members of the Senate, so we've been detailing more specifically who's not included as a broker. So the good thing about that, it has brought those senators who have an interest in the subject together. And to my delight, the chairman of the Senate Finance Committee is one of those. So it's been really nice to work with Ron Wyden on this and to better understand his interest in this space.
But then something surprising happened when they scored the bill, which is what they do to say how much money it's going to raise. They said our Amendment was going to reduce the amount of revenue that could be raised from the bill, which shows me that they were actually counting revenue coming in from people who are reporting transactions in digital assets. But they're counting people who don't have any information about the buyers and sellers of digital assets.
Miners rarely know the ultimate customer. People who write the software and the hardware for personal wallets rarely know the ultimate customer. And they were counting these as people who would provide information and therefore generate revenue to pay for this infrastructure bill. So what that indicates to me is there's not only a lack of understanding, there's an actual misunderstanding about some of the people's roles in digital assets.
JESSICA SMITH: Well, Senator, we did hear from Senator Portman saying that he doesn't think that that is the case, that it's not going to have new requirements on miners, developers, et cetera. I mean, what are you hearing from this bipartisan group and from the administration? Do you think they will be on board with this change that you're trying to push through?
CYNTHIA LUMMIS: Well, I hope so. I think today is going to be the day that we finally get to offer the amendment. The people who are scoring the bill seem to have misunderstandings. I don't know that Senator Portman is confused. I think he gets it. So this amendment should be a friendly amendment to those who never intended to generate revenue-- tax revenue-- by disclosing the ultimate customers of digital assets, such as miners who would never have that information or the people who verified those transactions. I think Senator Portman gets it, but I'm worried that the US Treasury Department doesn't get it. And they're the ones who seem to be advocating to have-- use this broader language in the definition of broker.
ZACK GUZMAN: Yeah, for a Senator like you who, you know, owns Bitcoin, who represents and kind of tries to defend the sector, a lot of people out there who own Bitcoin as well, this kind of seems like a nightmare scenario when it comes to getting included into, you know, the infrastructure bill, which already was kind of a mess going back and forth to get that done. But now you have to get over the 60 votes in the Senate with this amendment. I mean, when you think about getting those votes, what does that look like in your discussions, as you describe them, kind of getting people to even understand the issue?
CYNTHIA LUMMIS: Oh, well, Senator Wyden and I talked about that last night. We're trying to put together a very short tutorial that we're going to hand out today to members of both sides of the aisle, along with Senator Toomey, so we can help people try to understand this issue at least well enough to justify voting for this amendment. And then hopefully, when we are back from our August recess, if we actually get to go on one, we will be able to start pulling people together-- a bipartisan group-- in recognition of the lack of understanding about this subject and start really good education forums.
JESSICA SMITH: Senator, I'm curious, as you're working on these issues, you also do own Bitcoin. You've been an outspoken advocate of Bitcoin. Are you concerned at all about a conflict of interest or perceived conflict of interest as you're helping craft some of this legislation?
CYNTHIA LUMMIS: Well, you know, that has been mentioned to me. But I'll tell you, Bitcoin is a commodity. I'm also a rancher. Cows are commodities. I own cows. People don't care that I advocate for ranching and for livestock grazing. And so to me, they're somewhat analogous. So I don't believe I have a conflict. I own other assets that I have also disclosed and that I also, because I own them, have taken an interest in being knowledgeable about them. So I think it gives me an advantage that I have a little skin in the game. And it really-- it is a little bit of skin in the game. You know, I bought my first three Bitcoin for $330 each,
ZACK GUZMAN: Hey.
CYNTHIA LUMMIS: --so I've got less than an $1,000 investment in my first three Bitcoin because I bought them so long ago.
ZACK GUZMAN: Yeah, you and I both got involved around the same price point then. My brother gave me a gift back then. But when we talk about how complicated this is now-- because if you think about the infrastructure bill and getting it through, you talked about the $28 billion in revenue. That seemed to be kind of something that both sides enjoyed, in terms of paying for it. If that comes down as we're talking about maybe exempting some people, does that become an issue in getting this across the finish line? And also, if you're educating people about the issues there about noncompliance and companies that just can't comply with it, I mean, it sounds like-- could it uncouple the infrastructure bill altogether in getting the votes?
CYNTHIA LUMMIS: Well, it could uncouple our amendment. You know, if people believe that we're trying to exempt from revenue collection people who are having access to information that could generate revenue, then we've got a problem.
JESSICA SMITH: Senator, real quickly, if this amendment is included in the bill, would you support the final version of the infrastructure bill? Are you going to vote for it?
CYNTHIA LUMMIS: You know, there still are some other issues that I'm very concerned about in this bill. We've got another day and maybe two of amendments that need to be worked through. If we-- if I had to vote right now, I would vote no. But you know, I'm trying to get to yes on the bill. That's why I continue to amend and amend and amend. But at some point, you know, we're going to be making a decision on it. And you know, at this point, I'm not convinced that this is a good piece of legislation.
ZACK GUZMAN: And Senator, I mean, lastly, I guess, you know, the flip side to that, if you get this amendment through, what do you expect the voting to look like there in the Senate? As we talked about, it sounds like everyone was on board. If you listen to, you know, your-- as you discussed there, Rob Portman saying that their votes were there, is that your assessment?
CYNTHIA LUMMIS: That is. This bill is going to pass, which is why I'm working so hard to try to make it better, regardless of how I vote. They have the votes to pass this bill.
ZACK GUZMAN: That's why the crypto sector is on edge there, specifically the miners. We talk so much about how much they gained in terms of China's crackdown on them. A lot of them coming to the US and now you're having to deal with this when it comes to disclosures that they probably just won't be able to comply with. We'll see what happens with that amendment push. Of course, still a few things, as you heard there from Senator Lummis, to work out between her push and the rest of the senators there to even understand what's going here.