A leading nonprofit cryptocurrency 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 Treasury Department to force DeFi protocols to follow the same reporting rules as broker-dealers securities would “cripple” the US digital assets industry and impose illegal compliance rules on developers.
Last week, the Treasury Department issued a press release regarding 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, said,
“The IRS and Treasury have gone beyond their statutory authority by expanding the definition of “broker-dealer” to include providers of DeFi trading interfaces, even if they do not transact transactions.
Not only would this violate the privacy rights of individuals using decentralized technology, but it would also push all of this booming technology overseas.
The Blockchain Association continues to support DeFi innovators and users and will continue to fight this misguided regulation to ensure the United States remains a hotbed for decentralized financial technology and developers.
In a recent thread on social media platform X, Kristin Smith, executive director of the Blockchain Association, says the new rules are unconstitutional.
“Today, we are taking action by filing a lawsuit that argues that the current regulation of broker-dealers violates the Administrative Procedure Act and is unconstitutional. We stand with our country’s innovators and will continue to work to ensure the future of crypto – and DeFi – is here in the United States.
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