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Hidden Danger in the Infrastructure Bill with Abraham Sutherland & Greg Xethalis

Peter McCormack

Interview | Description | Timestamps | Show Notes

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Hidden Danger in the Infrastructure Bill with Abraham Sutherland & Greg Xethalis - WBD408 Peter McCormack

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Location: Austin, TX
Date: Friday 8th October
Company: Independent, Multicoin Capital
Role: Independent, General Counsel and Chief Compliance Officer

In August, a bipartisan group of 69 senators passed a $1 trillion infrastructure package, including around $550 billion projected federal spending on roads, bridges, expanded broadband access and more.

While this may seem irrelevant to Bitcoin, this 2000+ page document outlined how the government plans to fund the bill. Under the 'Other Provisions' section, the bill focused on the reporting requirement for "brokers" of digital assets and their definition. These reporting requirements are designed to extract a tax from users who misreport or underreport their taxes. 

This bill section caused a considerable backlash from bitcoiners as the proposed language is extensive and seems almost impossible to comply with.

While bitcoiners were up in arms about the broker definition, lawyer Abe Sutherland says that the bill contains an overlooked "digital assets" provision that could become a far bigger issue, affecting almost every bitcoin user if it becomes law.

In this interview, I talk to independent lawyer Abe Sutherland and Greg Xethalis, General Counsel and Chief Compliance Officer at Multicoin Capital, to discuss the onerous new reporting requirements hidden within the Infrastructure Bill.

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00:01:57: Introductions
00:03:10: Provision 6050I explained
00:09:22: Violation of the $10,000 transaction limit
00:11:30: Defining "trade or business" activity
00:14:06: The 1984 statute
00:16:45: The five elements of the statute…
00:17:17: … 1: a receipt
00:20:15: … 2: $10,000 threshold
00:23:02: … 3: responsibility lies with the recipient
00:24:38: … 4: definition of a digital asset
00:24:56: … 5: exemptions under the Bank Secrecy Act
00:29:33: KYC and honeypots
00:31:31: More on the Bank Secrecy Act
00:35:07: The digital asset community's obligations
00:42:38: Government surveillance
00:43:47: Next steps
00:44:53: Final comments

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