U.S. Senator Cynthia Lummis is set to present a new bill on responsible financial innovation that would affect the way cryptocurrencies are taxed. In the Meet the Press Reports, she said that in terms of policy-making, ownership of bitcoin is no different from ownership of cattle. Senator Cynthia Lummis is one of the most vocal bitcoin supporters in the US government and, among other things, is also developing a policy that would affect bitcoin and other crypto assets that do not yet fall under a strong regulatory framework in the US.
"Is it a conflict of interest?" said "Meet the Press Reports" host Chuck Todd during the interview and continued:
“NOT AT ALL! I ALSO OWN COWS AND COWS ARE A COMMODITY. BITCOIN IS A COMMODITY. SHOULD I SELL MY COWS BECAUSE THEY ARE A COMMODITY AND I AM NOW ON A BANKING COMMITTEE WHICH MAY BE RELATED TO THE COMMISSION FOR TRADE IN COMMODITY FUTURES? ARE THERE LAWS IN THE CONGRESS THAT AFFECT THE MARKETING OR OWNERSHIP OF CATTLE? ”
According to the U.S. Senate Ethics Committee, the answer is no.
Based on the 2021 guidelines, senators must "disclose any purchase, sale or exchange of any shares, bonds, commodity futures or other securities if the transaction exceeds $ 1,000." And to be clear, commodities and commodity futures are different; the former are real things, while the latter are financial agreements to buy the item at a later date at a predetermined price.
In the case of cryptocurrencies, members must report the coins or tokens they hold, and where applicable the exchange or platform that holds them. As an incoming senator in 2020, Lummis reported holding BTC worth $ 50,000 to $ 100,000, and in August 2021 reported another purchase of BTC worth $ 50,000 to $ 100,000. She did not report any income from the sale of these assets. But the same is not true of her cows. According to submissions as of January 2021, she owned $ 1 to $ 5 million in cattle and reported $ 110,000 in income.
However, Lummis, is preparing a law on responsible financial innovation to provide tax guidelines for capital gains from bitcoins, staking and other crypto activities indicated in an interview that even if she sold everything today, it would not matter.
“I BOUGHT MY FIRST THREE BITCOINS FOR $ 330 PER PIECE. SO I WAS IN THE GAME FOR ABOUT $ 1,000. NOW IT IS A MARKET $ 1.8 BILLION. SO IT IS A VERY LARGE MARKET. AND I AM JUST A GRAIN OF SAND. ”
At the heart of the problem is that many people consider bitcoin an investment. Which it may be, but regulators didn't necessarily treat it that way. In 2019, the chairman of the US Securities and Exchange Commission, Jay Clayton, declared that bitcoin was not a security. Securities are investment contracts such as stocks and bonds; people put money into them because they have "reasonable expectations of the profit that will be gained from the efforts of others".
However, this is not quite the case with bitcoin, as bitcoin is a decentralized network maintained by many different people. In addition, it is also designed in such a way that transactions take place in it - whether people choose to do so or not. Lummis says:
"AT SOME POINT (BITCOIN) WILL BECOME A PAYMENT, WHICH IS NOT JUST YET, BUT IT WILL HAPPEN REALLY FAST."
If this happens, it could put an end to all conflicts of interest.