Crypto stakeholders are protesting as the U.S. Department of the Treasury and the Internal Revenue Service (IRS) finalize new reporting rules for decentralized finance (DeFi) brokers.
According to a new press release by the Treasury Department, while the new rules don’t add any taxes on crypto assets, they require DeFi brokers to report on the gross proceeds of sales of their digital assets, making them follow the same rule as traditional securities brokers.
The rule also means that owners of digital assets who engage in DeFi transactions will receive the same form as well from their broker.
Aviva Aron-Dine, the Assistant Secretary for Tax Policy, says in the press release that the new rule will help taxpayers be compliant.
“These regulations will help ensure that all taxpayers play by the same set of rules and have access to the information they need to file their taxes accurately.
Aligning tax reporting requirements for digital assets with reporting for other assets will make filing easier and cheaper for compliant taxpayers while also helping close the tax gap.”
In a recent thread on the social media platform X, Kirstin Smith, the chief executive of the nonprofit crypto advocacy group Blockchain Association, says that the move is the Biden Administration’s last-ditch effort to hurt the industry before pro-crypto politicians take power.
“Today’s broker rulemaking by the IRS and Treasury – days before the end of the year – is a disappointing, but expected, final attempt to send the American crypto industry offshore.
On behalf of the industry, we’re prepared to take aggressive action to fight back. We also look forward to working with the new pro-crypto Congress and Administration to roll back this and other anti-innovation rules.”
Prominent crypto lawyer Jake Chervinksy also took to X, saying that the decision is “unlawful” and should be reversed.
“IRS has finalized the second half of its broker rule, requiring most DeFi front-ends to KYC (know your customer) users starting in 2027. This unlawful rule is the dying gasp of the anti-crypto army on its way out of power. It must be struck down, either by the courts or the incoming administration.”
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