Things just got ugly for crypto in Washington, D.C.

For years, the threat of major regulation has been raised like a hammer, ready to smash the crypto industry. Now, the hammer is ready to drop in the unlikely form of a major infrastructure bill in the U.S. Senate.

"This is not a drill," writes Jake Chervinsky, an influential crypto lawyer and a sober voice in a hype-prone industry. In a must-read Twitter thread, Chervinsky explains how the $550 billion bill—which is primarily about roads and bridges—could shiv American crypto companies.

The pain comes in the part of the bill that explains how the U.S. will help pay for those roads and bridges. Namely, the bill states that Uncle Sam plans to cover $28 billion of the costs by squeezing crypto brokers.

The trouble is that the bill defines "broker"—a term normally used to describe the likes of Coinbase and Robinhood—as basically any business that touches crypto. As Chervinsky writes, "This definition is so broad, it could apply to nearly every economic actor in the U.S. crypto industry, if read literally." The catch-all "broker" term could apply to miners, DeFi startups, and others who will have to file customer forms with the IRS, a task that is in some cases impossible.