Blockchain Trade Groups Challenge New US IRS Crypto Rules
The US Internal Revenue Services (IRS) and Treasury are currently facing a legal challenge from several blockchain trade organizations regarding newly introduced regulations for crypto brokers. These groups argue that the rules, which are scheduled to be implemented in 2027, are unconstitutional and could significantly harm the digital asset industry.
Details of the Lawsuit
The lawsuit was filed by the Blockchain Association, DeFi Education Fund, and the Texas Blockchain Council in a US District Court in Texas. According to the complaint, the new regulations will impose unlawful compliance burdens on software developers and stifle innovation within the digital asset sector.
On December 27, the IRS released its final regulations requiring crypto brokers to report digital asset transactions. The rules also extend reporting obligations to decentralized exchanges and other front-end platforms. The blockchain groups claim these measures ignore industry feedback and will push the burgeoning technology offshore.
Industry Reactions
Marisa Coppel, head of legal at the Blockchain Association, expressed concern over the expanded definition of ‘broker’ to include DeFi trading front-ends, even though these do not directly facilitate transactions. Coppel emphasized that this expansion could infringe on the privacy rights of individuals using decentralized technology.
Similarly, Miller Whitehouse-Levine, CEO of the DeFi Education Fund, voiced his disappointment with the IRS’s decision. He highlighted the potential of Decentralized Finance (DeFi) to make financial services more accessible and consumer-focused. Whitehouse-Levine stated, “This unfortunate rulemaking is a direct threat to financial innovation, and we intend to fight it using every tool available to us.”
Implications for the Digital Asset Industry
The lawsuit underscores the tension between regulatory bodies and the rapidly evolving blockchain industry. As governments worldwide grapple with how to regulate digital assets, this case could set a precedent for how decentralized technologies are governed in the US. The outcome may have broader implications for innovation and entrepreneurship in the digital economy.
For further reading and updates on this developing story, visit the source: Finextra.
