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U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry
- nomoreplease 5y agoEverything in the article leads me to believe this only threatens the “cryptocurrency” industry, but I don’t have the actual text to the amendment. Is anything threatening “crypto” itself?
- meepmorp 5y agoNo, and I hate that people shorten cryptocurrency to crypto.
- dcolkitt 5y agoThe term “derivatives” is widely used for financial derivatives like options and swaps. It’s gained such widespread adoption that it by far dwarfs the original meaning of the instantaneous rate of change in calculus. I think the simpler answer is that when a word has two meanings, one a widely used category of financial instruments and the other a narrowly defined branch of advanced mathematics, the former will almost always dominate everyday discussion.
- Retric 5y agoPossibility, I have heard “derivatives” most commonly used as a math term not a financial one. But it’s got plenty of other meanings: https://www.merriam-webster.com/dictionary/derivative https://www.merriam-webster.com/dictionary/derivative
- tantalor 5y agoAs in "something that originates from something else"
- deleted 5y ago[deleted]
- gruez 5y ago>that it by far dwarfs the original meaning of the instantaneous rate of change in calculus. That's not even the original meaning. According to etymology section on wiktionary, it dates back to middle french and latin, before issac newton was even born. https://en.wiktionary.org/wiki/derivative#Etymology https://en.wiktionary.org/wiki/derivative#Etymology
- lukeschlather 5y agoCryptography is more widely used than cryptocurrency. That people don't understand they're using it doesn't change the fact that "threatens the cryptography industry" is more scary than "threatens the cryptocurrency industry" especially since cryptocurrency relies on cryptography so it would be directly threatened as a consequence.
- talideon 5y agoThe term 'derivative' is rarely ambiguous, where as 'crypto' often is. That's a key difference here.
- nomoreplease 5y agoDerivatives industry means one thing though, and doesn’t mean the mathematics industry. It’s not ambiguous either
- darksaints 5y agoDo you also hate that cryptography is shortened to crypto?
- meepmorp 5y agoNo.
- zarzavat 5y agoThe prefix "crypto" means hidden or disguised in English. Neither cryptocurrency nor cryptography have a monopoly on it. The way people get exercised about this issue you'd think that "cryptography" is the only word in the English language to use the prefix "crypto-".
- lukeschlather 5y agoThe thing is that cryptocurrency is really a niche application of cryptography, where cryptography is very broadly used. So it's a little like if people started using "petroleum" to mean petroleum jelly. Sure, nobody is aware of cryptography's effect on their life. But it is a key ingredient in everything including cryptocurrency.
- tromp 5y agoSeconded. I also hate that they shorten proof-of-work algorithm to "algo" (often just referring to the hash function used in the widely used Hashcash PoW).
- atonse 5y agoYes thank you. I was alarmed in light of the Apple stuff that this is yet another attack on security.
- gruez 5y agocomment from a previous discussion: https://news.ycombinator.com/item?id=28075226 https://news.ycombinator.com/item?id=28075226 >the following categories do not count as brokers: >(A) validating distributed ledger transactions >(B) selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or >(C) developing digital assets or their cor- responding protocols for use by other persons, provided that such other persons are not cus- tomers of the person developing such assets or protocols.
- deleted 5y ago[deleted]
- jcranmer 5y agoThat's Wyden's amendment to this amendment. The amendment in question here is saying that a "broker" now includes anyone > responsible for and regularly providing any service effectuating transfers of digital assets (incidentally, I don't see how category (B) or even category (C) from Wyden's amendment could be reasonable construed as being included in the original text--those are products not services. I will concede that I can see how category (A) can be construed, although I doubt it would be so construed). [Also note that "digital assets" is defined elsewhere in the amendment, although the news media didn't report on the precise text for digital asset, so I don't have it handy. But it's basically a reasonable definition.]
- vishakh82 5y agoIf you think all cryptocurrencies are scams or think blockchains do nothing useful, please skip this comment. If you think things like decentralized finance, storage and identity have the potential to improve our lives and offer some of the only genuine alternatives to an increasingly privacy-hostile status quo, please look into the shambolic legislative process that threatens the entire blockchain industry in the United States. This is the time to act and ensure that cryptocurrency provisions are debated meaningfully in Congress before any relevant legislation is passed. What the Senate is doing right now reeks of both outright incompetence and malice. There are many, many companies and builders active on HN who are about to have their existence challenged.
- gameswithgo 5y agoyou have artificially tried to divide people into one of two extreme camps! cryptocurrency is either totally useless or the savior of the world! Most of us do not believe either of those things. At the moment I apllaud any legislation that outs the brakes on current crypto currencies. The damage they have been doing to the world so people can gamble/speculate has been immense, its a tragedy. Money transferring to the lucky all while burning through energy.
- vc9999 5y agoYou do understand that nobody forces anyone to gamble or speculate with cryptocurrencies, right?
- deleted 5y ago[deleted]
- gruez 5y agodiscussed previously: https://news.ycombinator.com/item?id=28074809 https://news.ycombinator.com/item?id=28074809
- Ajedi32 5y agoUnless I'm misunderstanding something; I think this article is saying that the amendment being discussed in the post you linked failed to pass? So I guess now we're back to the previous previous discussion where the EFF was decrying the bill as a privacy disaster: https://news.ycombinator.com/item?id=28045227 https://news.ycombinator.com/item?id=28045227
- thanksforfish 5y agoRelevant Senate links appear to be: • https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=117&session=1&vote=00313 https://www.senate.gov/legislative/LIS/roll_call_lists/roll_... • https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%20Toomey%20Crypto%20Amendment.pdf https://www.finance.senate.gov/imo/media/doc/Wyden%20Lummis%...
- repler 5y agoThere are a whopping 505 amendments for this bill. Thank you for the direct link to the Wyden/Lummis/Toomey amendment. I don't know how anyone can keep track of what a final bill would look like - seriously need something like Git to even keep up. I think I understand now when folks in Congress complain they "don't know what they're voting for". They need better tools. Here are all 505 if anyone is interested: https://www.congress.gov/amendment/117th-congress/senate-amendment/2137/all-info https://www.congress.gov/amendment/117th-congress/senate-ame...
- JediWing 5y agoWhat are the reporting requirements? Will they lead to taxation? Overhead computing resource per block/transaction validated? Is this reporting only, or will it result in additional taxes? This seems light on details, and I really don't know what opinion to have on this without understanding what the requirements are. Nothing I've read succinctly explains this.
- jcranmer 5y agoThe same reporting requirements as banks. So the amendment is basically saying that anything that looks bank-ish in cryptocurrency terms will actually be treated as a bank for KYC/AML requirements. The consternation is that the "anything that looks bank-ish" is too broadly defined, but from my reading, it really isn't.
- cs702 5y agoWINNERS: Large corporations and financial institutions. They can afford the now-required overhead for all kinds of services, including transaction processing with fees and rewards, i.e., mining, and make a nice profit at high volumes. LOSERS: Smaller service providers. They cannot afford the now-required overhead because they don't have sufficient economies of scale.
- salawat 5y agoWhat? You expected the U.S. Government to not go after maintaining the levers it needs to project power through economic control of who is allowed to transact what?
- starkd 5y agoThere are less heavy ham-fisted approaches they could take. But they don't seem inclined or even interested in knowing the topic well enough to figure out how to do so.
- knorker 5y agoWINNERS: Rule of law LOSERS: Criminals who saw so much hope in trivially laundering their ill gotten gains now see that as slightly less likely.
- paulpauper 5y agoIf crypto does have a future it won,t be in the US.
- cblconfederate 5y agoIt never was
- JumpCrisscross 5y agoI've been following this discussion in Washington and on Hacker News. I'm moderately anti-crypto--I don't buy the pitch but am open to being wrong and believe folks should be free to do what they want with it. I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Binance and ersatz money transmitters like BitPay. We need AML (edit: anti-money laundering) and tax reporting at those nexuses. If the answer is there should be no AML, KYC (edit: know-your-customer rules) and/or reporting by cryptocurrency companies, we have no common ground on this argument. To date, this is what I have most-commonly heard. If that's what the Senate is hearing, it's unsurprising they consider the debate closed. If the argument is a reasonable tweak to who has to report, or what or the form in which it must be reported, policy makers are listening. (Wyden's amendment is a result of reasonable concerns expressed by miners.)
- danShumway 5y ago> Wyden's amendment is a result of reasonable concerns expressed by miners I'm honestly kind of surprised Wyden's amendment didn't get accepted. I guess I misunderstood the level of support it actually had; it seemed reasonable to me and I thought that most of the interest groups had gotten onboard with it. Maybe that's an area where I'm just in a bubble.
- ajmurmann 5y agoI hear that later another amendment was pushed forward by sensors that perviously had voiced support for the Wyden amendment. This new amendment supposedly provided no solutions to done of the problems, but immediately found support from the White House as well and is rumored to have been pushed by the Treasury who doesn't like crypto.
- zonethundery 5y agoIt "felt like" some common ground between the wyden and portman (and its successor) amendments would be found. It was complicated by Senate procedural votes that made amendments much harder, and an overlying concern about CBO scoring of the budget impact of the bill. It can still be amended by unanimous consent (all 100 senators)but wyden or portman will have to blink and all the bill-haters will have to acquiesce.
- danShumway 5y agoBlegh. I think that cryptocurrency was a well-intentioned experiment trying to solve real problems, but that it has broadly failed, and that some of the knock-on effects of speculation on top of the cryptocurrency ecosystem are just unambiguously harmful at this point. It's not just the environmental concerns from PoW; I have concerns about privacy, about how coins have derailed (in my mind) more legitimate efforts to improve modern financial systems. And I have cultural concerns about how this plays into some of the worst instincts of modern society towards speculation and artificial scarcity purely for their own sake, disconnected from any problems or utility. NFTs are the type of technology that honestly shouldn't have been developed, they're pointless and exploitative. But as much as I do kind of want cryptocurrency to crash and die, I really don't want to do it this way. I've seen some people argue that this wouldn't apply to software developers, but I don't like that the question is under debate at all. The idea that it theoretically might is terrifying, if it's not intended to apply to developers why wouldn't we clarify that in the bill to assuage those fears? And even where miners are concerned: I would like to see mining (particularly PoW mining) eventually become unprofitable, but pushing those people into the category of brokers seems really problematic and short-sighted. My worry is both that this will open the door to a lot more unnecessary data collection, and that further down the road it might hinder efforts to make better alternatives to the current cryptocurrency industry. The financial concerns are real, but the really troubling part to me is the reporting requirement. Software developers shouldn't be collecting this kind of information, neither should miners. I also haven't seen a lot of consensus about what technologies the label "digital asset" could apply to in the future, and that worries me a lot as well. I am not a legal expert, I don't feel qualified at all to speculate on how this stuff is determined. A smaller group of people saying that "obviously X made-up digital token or point system or game item wouldn't count" -- that's not super-reassuring to me because I'm not smart enough to evaluate the accuracy of their claims. I want to see more qualified legal experts weigh in. I don't want to see games suddenly collecting a lot of personal information just because technically someone could sell a digital item to another player for money. I like Wyden's amendment: it still goes after brokers, but it makes it clear who a broker is (and importantly, isn't). And I thought that there was pretty decent bipartisan support for Wyden's amendment. It's really frustrating that support seemed to only be good enough to get 29 votes.
- 5y ago
- EGreg 5y agoOh my goodness. Here is Portman himself in his own words: “The Treasury Department, the nonpartisan Congressional Joint Committee on Taxation and others believe that the current language is clear and that the reporting requirements only covers brokers, but my view is that we should work to clarify this given the potential for confusion on an extremely important issue. In particular, we want to be sure miners and stakers and others now or in the future who play a key role by validating transactions, or sellers of hardware or software for digital wallets, or node operators, or others who are not brokers are clearly exempted.” Video: https://youtu.be/p0auPbbDQnY https://youtu.be/p0auPbbDQnY AND YET the Warner-Portman-Sinema (note the Portman in there!) amendment doesn’t specifically exclude stakers or validators who may now or in the future secure the networks, and certainly not the catch-all “others who are not brokers”? Only exempts proof-of-work miners? Yet he claims it was already “clearly exempted” in the proposed bill at the time of his speech and the amendment was supposed to clarify that?? I wonder if the Senator’s own words on the floor, and assurances that the Treasury and others hold the same view, could be used in court cases to clarify the meaning of “broker” later on, in favor of the defendants (Ethereum proof of stake miners, say) when they will invariably be served papers and prosecuted for not reporting. Seriously, how can you say one thing and do another so blatantly? This is worse than “if you like your plan you can keep it”. Will the Treasury and others likewise say one thing in private (as he reports) and quickly flip when it comes to making examples out of non-reporting POS miners?
- new_realist 5y agoWelcome to the modern Internet, where special interests like crypto outrage-farm on HN in support of their lobbyist objectives.
- lauangelcu19 5y agoThe only winner? Senate
- lauangelcu19 5y agoThe only winner? Senate.
- alksjdalkj 5y agoI don't really follow any cryptocurrency news but wasn't one of the main appeals early on that it would be independent from any governments? Specifically that it could be a currency not subject to the oversight and sanctions of the US treasury? I guess "cryptocurrency" is different from "cryptocurrency industry", but it still seems like the ecosystem as a whole should be more resilient to actions from the US government. Otherwise what's the point?
- deleted 5y ago[deleted]
- frankbreetz 5y agoGovernments can't control it in a sense that they can't create more of it and can't sensor transactions(sanctions) . If you think of it as the same idea of gold, the government can't make more it. They can limit transactions to a degree, but they can't really stop one person from handing another person a suitcase full of gold. They can make laws around it, but they will not necessarily be enforced. There is of course oversight over gold, but the government doesn't have as much control as fiat. Namely they can't make an infinite amount just by passing a bill. The government can make as many laws as they want, whether they are enforced or not is another matter.
- deleted 5y ago[deleted]
- onepointsixC 5y agoGovernments can control it. In the end of the day, sure they can't control that gold, but moving gold itself is a problem. You can't go to a dealership to buy something with your gold suitcase. In order to do anything useful with that stored wealth you need to convert it to cash and that's where they get you. That's how they control it.
- dcolkitt 5y agoCryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding. The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even remotely competent to eliminate illicit drugs or even reduce the supply of illicit drugs? Not even close. But is the government capable of finding a few poor bastards and ruin their lives to make publicity stunts? Absolutely. Just like with drug laws, the primary victims are going to be the disadvantaged and disconnected. Just like with drugs, the elites will be able to insulate themselves from the rules. Two out of three of our past presidents suffered no consequences from their admitted illicit drug use, while millions of poor minorities were locked up. I’m a professional crypto dev, and I’m not sweating this at all. Our venture funded startup can easily afford high powered lawyers to make sure we’re compliant. Now what about the 17 year old hacker who quickly uploads a smart contract that he thinks does something cool, and all of a sudden is looking at two decades in federal prison because Elizabeth Warren wants to nail a sacrificial “shadowy super coder” to the wall.
- frankbreetz 5y agoStrangely, crypto has gone up in spite of this news. This seems worse then China banning mining, which caused a pretty significant drop earlier this year. Why would this not effect the market in a similar fashion. As far as I understand it, this effectively bans crypto mining in the US. Am I missing something?
- csomar 5y agoIf you think the crypto-market moves on news, then you have missed on some sweet gains. The news effect is getting reduced since every single time it proves that it doesn't matter. Bitcoin price is lead mainly by retail demand. Speculators are quick to panic on the way down, but the return of retail demand end up in a new bubble. This is mostly the byproduct of lack of faith on the foundations of the price. These effects are less felt now that the market has matured. Of course this is purely my opinion and observation. So take that with a bag of salt.
- cblconfederate 5y agoRush to buy before regulatiob kicks in? I mean the whole crypto rallies until now were not because of government help . Until recently banks would close your account if you bought cryptos
- davidcbc 5y agoBecause whenever there is bad news for cryptocurrency Tether prints a billion dollars worth of coins out of thin air to artificially inflate the price of BTC
- jondwillis 5y agoI am no fan of the ongoing Tether fraud and share this view, however, instead of cynically declaring this to be the case, it'd be nice to see evidence of that occurring right now.
- davidcbc 5y agohttps://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 https://twitter.com/whale_alert/status/1424484871737692161?s=21 https://twitter.com/whale_alert/status/1424484871737692161?s...
- tfehring 5y agoI guess I don’t understand what the amendment actually does. If you’re a crypto miner, you already have to report your own income from that activity to the government; failure to do so is already a crime, namely tax evasion. And if you’re not a custodian, by definition your own activity is the only activity that you have data on, right? What new reporting does this actually mandate?
- flyingfences 5y agoThis mandates miners (and developers, and others who are not custodians) reporting data on others that they do not and cannot have.
- tfehring 5y agoRight, that's what the article says, but what specific data would they be required to report and in what context?
- Finnucane 5y agoHey, the crypto industry has Ted Cruz in its corner, so that's, uh, okay, well, never mind.
- fridif 5y agoIf they kill crypto, we will always still have barter. If they kill barter, then we've got serious problems.
- onepointsixC 5y agoAs someone who has been sorely disappointed by much of how crypto has developed since it's early days and is somewhat a crypto pessimist, I'm extremely disturbed that something which could outright kill US Crypto is being rammed into a infrastructure spending bill. If you want to ban crypto, fine, that's a position which could be taken, debated, and discussed. But it should be done separately and given sufficient time for public feedback. Stuffing it into this bill is asinine to the nth degree.
- starkd 5y agoMaybe because they know it is unpopular and they can't buy off senators who will only vote for it because it contains unrelated provisions they want?
- pionar 5y agoIt's not being "stuffed" into a bill, it's an amendment that had voting on it. There was a competing amendment that didn't get the support this one did.
- Texaner 5y agoCome on... He's not complaining about lack of voting. Obviously everyone is abiding by formal procedures. The problem is when congress passes bills under one name while it contains a myriad of unrelated legislation. This is bad for public transparency.
- nybble41 5y agoIt's the infrastructure bill itself that contains the poorly considered provisions which (arguably) require miners and unhosted wallet developers to collect and report transaction information to the IRS. The competing proposed amendments to mitigate this have yet to be subjected to a vote.
- knorker 5y agoNo it's fine. It's just the cryptocurrency/smart contract industry. Crypto will be just fine.
- specialist 5y agoJust to be clear, "crypto" is short for cryptocurrencies? This legislation does or does not impact other cryptography use cases? My concern comes from government's long standing opposition to personal cryptography. eg Clipper chip in phones.
- echopurity 5y agoMany people start coding at a young age. Imagine your kid having to report their dapp to the IRS. It's not about the money. It's about the control. The situation is probably worse for adults. Why go through the hassle of developing dapps when it means dealing with the IRS and potentially jail, etc.? Personally I've abandoned working on completely harmless dapps because of threats from the state. It's stifling for independent development. On the other hand, when people compare this to China banning mining, I think the USA is far friendlier to crypto than China, because, as the ascending fiat superpower, China has much more to lose. As the dollar continues to devalue, the USA would most likely prefer a future based on Ethereum rather than the Yuan.
- gizmo686 5y agoMany people start wood working at a young age. If they want to build a house, they need to acuire permits, comply with zoning regulation, comply with building codes, get sign off from a certified engineer. Not all coding is the same. If you want to work to code in a regulated industry, you need to play by the regulations. Finance is a regulated industry, not a sandbox.
- armatav 5y agoYeah but at the same time if you mint a few beautifully patterned - 300 hours-of-work each - wood coins and trade them; it’s not finance and it’s unregulated.
- erhlkawrgiag 5y agobut muh democrat party wouldn't ever stab me in the back RRRRREEEEEEEEEEE!!!
- trident5000 5y agoDoesnt go into effect until 2023. Theres going to be time for them to tweak this.
- creese 5y agoThey've updated the title. The title now reads: "U.S. Senate Bill Threatening Crypto Industry Moves Forward"
- tablespoon 5y agoBitcoin crypto is the future of secure IPO communications.