Coin Center filed suit against the Treasury Department in federal district court, challenging the application of the Section 6050I reporting mandate.
Coin Center, a non-profit Blockchain advocacy group based in Washington, DC, has filed a lawsuit against the United States Department of the Treasury for alleged inclusion of an unconstitutional amendment in the controversial infrastructures Blockchain bill.
In an official announcement, Coin Center disclosed the filing of a lawsuit against the Treasury Department in federal district court, challenging the application of the Section 6050I reporting mandate within the Infrastructure Investment and Jobs Act.
Lawsuit Highlights
The lawsuit stated that, “In 2021, President Biden and Congress amended a little-known tax reporting mandate. If the amendment is allowed to go into effect, it will impose a regime of mass surveillance on ordinary Americans.”
Amendment 6050I requires individuals and businesses to report information related to all incoming transactions worth $10,000 or more, which includes the sender’s name, date of birth, and Social Security number.
Coin Center, in its announcement, highlighted how the amendment affects the entire cryptocurrency community, including NGOs that receive anonymous donations and non-fungible token (NFT) artists who will have to disclose their customers’ personal information to the government.
In the first claim of the lawsuit, Coin Center alleged that provision 6050I is not directed at collecting information about third parties, but instead focuses on information about the general public who participate in crypto transactions.
According to Coin Center, their suit “leads with two major claims: (1) forcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment; and (2) demanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment.”
“The second allegation concerns our freedom of association,” the company added, pointing to a Supreme Court ruling that prohibits the government from forcing organizations to maintain and report lists of their members.
As a final note, Coin Center turned to the cryptocurrency community to ask for their support, stating that they are considering “adding additional co-plaintiffs to this lawsuit, so if you fit this description and are interested, please get in touch.”
Coin Center is optimistic about their winning “this challenge, even if it’s necessary to go to the Supreme Court.”
On June 7, Cointelegraph came across a leaked copy of a US bill regarding cryptocurrency making the rounds on Twitter, which stated that, “here you go. (plz RT) pic.twitter.com/UOVhIUiUBu. — slam (@bot_slam).”
Protecting users appears to be the primary goal of regulators, with policies aimed at requiring any cryptocurrency platform or service provider to be legally registered in the United States, be it a DAO or DeFi protocol.
This could greatly reduce the chances of anonymous cryptocurrency projects being able to operate in the United States. Any cryptocurrency platform that is not registered in the country would be subject to tax, and the definition of DeFi remains imprecise.
The leaked bill also attempts to offer more clarity on securities laws in relation to digital assets, a demand that has been persistent from the cryptocurrency community and lawmakers. Under the US Commodity Futures Trading Commission’s definition of a commodity, if there is debt, equity, earnings, or dividend income of any kind, then it is expressly not a digital commodity.
Other research revealed regulators’ concerns around protecting users in decentralized finance (DeFi) ecosystems, stablecoins, decentralized autonomous organizations (DAOs), and cryptocurrency exchanges.
By Audy Castaneda
