A secretive amendment slipped into the infrastructure bill makes it a felony to move various digital assets without sharing lots of personal information. The amendment is so vague that it would impact ordinary people’s online privacy. Tell Congress to repeal the Section 6050i amendment now!

Congress doesn’t really understand how digital assets work, but our legislators are cooking up punishing rules about them anyway. Their latest: an amendment to Section 6050i of the tax code that imposes harsh data collection requirements on digital asset transactions and creates a new felony offense. Digital assets like tokens offer benefits to all kinds of people—the government should encourage their creative expansion, instead of treating tokens like illegal contraband.

When the law goes into effect in 2023, each receipt of digital assets like tokens, cryptocurrencies, and NFTs above $10,000 will require the receiver to report the sender’s name, address, and Social Security number, along with other personal information. Failure to do so within 15 days would be a felony, resulting in up to five years in prison or a $25,000 fine. Making people report income from digital assets is reasonable, but the way this law plays out causes a lot of totally unnecessary collateral damage.

Because the rule is so vague, artists, small businesses, and internet infrastructure at large could get caught up in the law’s net—and be subject to those hefty punishments. We agree that crypto barons and NFT boosters should pay their fair share in taxes, but we can accomplish that without putting important projects in the crossfire:

• Privacy-focused alternatives to Amazon Web Services have made it possible for the work of pro-democracy outlets in Hong Kong to survive. We should not force decentralized file storage project participants to report sensitive personal information to the U.S. government, or force projects to weaken their security in order to surveil participants.

• Alternatives to ISPs like Comcast and AT&T are providing important services to rural communities using blockchain technologies including tokens. They could be fined $25,000 if they fail to report cumulative microtransactions valued above $10,000 within 15 days.

• Artists using digital tokens to earn income could be thrown in prison for trying to sell their art without giving away their rights to exploitative gatekeepers like Newscorp, Disney, or Amazon. We get it that NFTs are controversial, and there are definitely genuine problems including carbon emissions, but this policy doesn't address any of those things, it just creates a ton of uncertainty for artists and creators—even those who have no interest in NFTs but want to engage with projects like user-owned alternatives to Spotify.

This amendment seems designed to scare people away from emerging technologies with a felony charge, and it definitely doesn’t provide a roadmap to thoughtful digital asset taxation. Congress must prevent this change from going into effect, because it could harm ordinary crypto users.

We have a pathway to repeal this wrongheaded amendment. Lawmakers have introduced bills to strike it down, and we expect the Treasury will also be looking into the negative impacts of this poorly-written legislation soon. But legislators need to hear more uproar from people like you saying that creating this new felony is wrong.

Sign on now to demand that privacy, creative rights, and alternatives to Big Tech come before an unnecessary and outdated tax reporting requirement!