A prominent nonprofit crypto advocacy group is filing a lawsuit challenging new reporting rules for decentralized finance (DeFi) brokers.
In a new press release, the Blockchain Association says the “midnight” decision by the Internal Revenue Service (IRS) and the Treasury Department to force DeFi protocols to follow the same reporting rules as stock brokers would “cripple” the U.S. digital asset industry and impose unlawful compliance rules on developers.
Last week, the Treasury Department issued a press release about a new rule requiring DeFi brokers to report gross proceeds from the sale of their digital assets.
As Marisa Coppel, head of legal at the firm, says:
“The IRS and Treasury Department have gone beyond their legal authority by expanding the definition of ‘broker’ to include DeFi trading front-end providers, even though they do not execute transactions.
Not only does this violate the privacy rights of individuals using decentralized technology, it would push this entire, rapidly growing technology offshore.
Blockchain Association continues to support the innovators and users of DeFi and will continue to fight these misleading regulations to ensure that the United States remains a home for decentralized financial technology and developers alike.”
In a recent thread on social media platform X, Blockchain Association CEO Kristin Smith says the new rules are unconstitutional.
“Today we are taking action by filing a lawsuit arguing that the current rules for real estate agents violate the Administrative Procedure Act and are unconstitutional. We stand with our country’s innovators and will continue to work to ensure that the future of crypto – and DeFi – is here in the United States.”
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