Three cryptocurrency industry groups, the DeFi Education Fund, the Blockchain Association, and the Blockchain Council of Texas, are calling the Internal Revenue Service to block new regulations that would require decentralized finance (DeFi) entities to report customer information. I'm appealing.
The IRS is finalizing cryptocurrency tax regulations as part of the Biden administration's Infrastructure Investment and Jobs Act. The IRS says these new rules should help “close the information gap regarding digital assets.”
The lawsuit, on the other hand, argues that this approach disproportionately relies on “DeFi trading front-ends,” online platforms that essentially allow users to access crypto protocols but do not necessarily “influence trades” themselves. They argue that this will impose a burden on the government. The complaint objects to defining these front ends as brokers, in part because “there simply is no broker-like entity involved in decentralized transactions.”
Marisa Koppel, the Blockchain Association's legal director, said in a statement that the new rules “violate the privacy rights of individuals using decentralized technology” and “will push the entirety of this burgeoning technology overseas.” said.