Bitcoin billionaires, a16z threw cash at US Senator before crypto tax vote
Galaxy Digital, Andreessen Horowitz (a16z), and Bitcoin billionaire twins Cameron and Tyler Winklevoss are on a list of donors to a US senator — just before she changed her mind about a proposed crypto tax amendment.
Arizona Democratic Senator Kyrsten Sinema received $180,000 from 50 crypto-related figures at a summer fundraising event held in Menlo Park, California, as detailed in a Twitter thread from journalist Roger Sollenberger.
The event took place before August’s vote on proposed changes to the Senate’s Infrastructure Bill, specifically the wording around tax reporting for crypto users.
Originally, the bill described a “broker” as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
However, this definition was too broad. Many feared the rules could apply to other participants in the crypto sphere, including miners and developers.
As a result, Sinema, fellow Democrat Mark Warner, and Republican Rob Portman proposed amendments. Their suggestions were still rejected by the crypto community.
This was on the grounds that, while miners were to be exempt, protocol devs and maintainers were still in the firing line. Their proposal was branded everything from “terrible” to “a stunning loss for America.”
Coinbase director Fred Wilson was there, too
Deep thinker and venture capitalist Naval Ravikant and Coinbase director-slash-investment guru Fred Wilson were among Sinema’s donors.
Insiders at stablecoin issuers Paxos and Circle also gave funds to Sinema, as well as lead figures from funds like Multicoin Capital, Galaxy Digital, Initialized Capital, Coinflip, and Ribbit Capital.
They all donated up to $2,900.
Sinema et al finally buckled under industry pressure and a press release issued after the fundraising event said:
“We’ve worked with the Treasury Department to clarify the underlying text and ensure that those who are not acting as brokers will not be subject to the bill’s reporting requirements.”
“While we each would have drafted this solution differently, we all agree it’s important to ensure that these obligations are properly crafted to apply only to entities that are regularly effectuating transactions of digital assets in exchange for consideration.”
The Senate ended up rejecting the proposed amendments.
Sollenberger points out there’s no direct evidence that Sinema was influenced by the crypto companies, personalities, or their donations.
But the spreadsheet does suggest an increasing lobbyist presence in the space.
Indeed, ahead of the last US election, Alameda Research founder and crypto billionaire Sam Bankman-Fried threw his hat into the political ring by giving more than $5 million to Joe Biden’s campaign — his second largest contributor.
a16z execs gave Sinema the most before crypto tax vote
What’s striking about the donations is that almost $25,000 came from execs at prolific crypto venture capital fund a16z.
As Sollenberger points out, no a16z execs had ever donated to Sinema before.
The firm launched its own $2.2 billion crypto fund in July. The firm was the one that labelled the amendment “a stunning loss for America.”
[Read more: Andreessen Horowitz wants $1B for its third crypto fund]
Despite the amendment failing to pass the Senate, the crypto world is still hoping it can have its say. There’s still time — the provisions won’t take effect until January 1, 2024.
To this end, Coin Centre executive director Jerry Brito last week posted his own lengthy Twitter thread.
In it, he details how the community can fight back against what he calls the “terrible crypto tax reporting provisions.”
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