The Infrastructure Bill and Crypto's First Political Fight

Buried in the 2,700-page US infrastructure bill was a provision that would have expanded the definition of "broker" under tax law to include virtually every participant in the crypto ecosystem — miners, validators, node operators, DeFi protocol developers, and anyone who facilitates digital asset transactions. These newly defined "brokers" would be required to report user transaction information to the IRS, including names, addresses, and transaction details.

The provision was designed to raise an estimated $28 billion in tax revenue over ten years by closing the "tax gap" in crypto — the difference between taxes owed and taxes collected. The intent was reasonable. The implementation was catastrophic.

Why the Provision Was Problematic

The expanded broker definition would have imposed reporting requirements on entities that do not have — and cannot have — the information required. A Bitcoin miner does not know the identity of the users whose transactions they include in blocks. A DeFi protocol developer does not have a customer relationship with the users who interact with their smart contracts. A validator on a Proof of Stake network does not collect personal information from the people whose transactions they process.

Requiring these entities to report information they do not possess would not close the tax gap. It would either force them to collect information that undermines the privacy and permissionless nature of blockchain networks, or it would force them to cease operations in the United States entirely. The provision was not just poorly drafted — it reflected a fundamental misunderstanding of how blockchain technology works.

The Political Mobilisation

The crypto industry's response was unprecedented. Within days, a coalition of crypto companies, advocacy groups, and individual participants organised a lobbying effort that generated thousands of calls to senators, raised millions in political donations, and secured bipartisan amendments to narrow the broker definition. Senators Wyden, Toomey, and Lummis introduced an amendment that would have excluded miners, validators, and software developers from the broker definition.

The amendment ultimately failed on procedural grounds — not because it lacked support, but because a single senator objected to the unanimous consent required to bring it to a vote. The original, problematic language remained in the bill that passed the Senate.

But the political mobilisation itself was the real story. For the first time, the crypto industry demonstrated that it could organise, lobby, and influence legislation at the federal level. The effort was imperfect — it started too late, relied too heavily on last-minute interventions, and ultimately failed to change the language. But it proved that the crypto constituency is large enough, wealthy enough, and motivated enough to be a political force.

My View

The infrastructure bill fight was crypto's political awakening. The industry learned that regulatory outcomes are determined by political engagement, not by technical arguments or ideological appeals. The companies and individuals who organised the response are now building permanent political infrastructure — PACs, lobbying operations, and relationships with legislators — that will be deployed in future regulatory battles.

The broker provision will likely be addressed through Treasury guidance or subsequent legislation before it takes effect. But the larger lesson is clear: crypto is now a political issue, and the industry must engage with the political process or accept outcomes that are shaped by people who do not understand the technology.

The infrastructure bill fight taught the crypto industry a lesson it should have learned years ago: in a democracy, the rules are written by the people who show up. Crypto showed up late. Next time, it will show up earlier.