The regulatory scrutiny of blockchains and cryptocurrencies is increasing. From the cryptocurrency mining ban in China to President Joe Biden’s Working Group on Financial Markets, convened by Treasury Secretary Janet Yellen, the economic activities that support and are enabled by blockchains have become a significant concern for policymakers. Most recently, a provision in the proposed 2021 infrastructure bill amends the definition of a broker to expressly include “any person who [...] is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
The stated goal of this “miner-as-broker” policy change is to improve the collection of tax revenues on cryptocurrency capital gains by enhancing the ability of tax collectors to observe cryptocurrency trades. Since cryptocurrency miners regularly validate transactions that transfer digital assets, such as cryptocurrencies, on behalf of cryptocurrency holders, these miners would appear to satisfy this definition of a broker. Unsurprisingly, many in the cryptocurrency industry have raised concerns.