A prominent nonprofit crypto advocacy group is filing a lawsuit to dispute 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 securities brokers would “cripple” the US digital assets industry and impose unlawful compliance regulations on developers.
Last week, the Treasury Department issued a press release about a new rule that requires DeFi brokers to report on the gross proceeds of sales of their digital assets.
As stated by Marisa Coppel, head of legal at the firm,
“The IRS and Treasury have gone beyond their statutory authority in expanding the definition of ‘broker’ to include providers of DeFi trading front-ends even though they do not effectuate transactions.
Not only is this an infringement on the privacy rights of individuals using decentralized technology, it would push this entire, burgeoning technology offshore.
Blockchain Association continues to stand with the innovators and users of DeFi, and will continue to fight this misguided rulemaking to ensure the United States remains a home for decentralized finance technology and developers alike.”
In a recent thread on the social media platform X, Kristin Smith, the chief executive of the Blockchain Association, says the new rules are unconstitutional.
“Today we’re taking action, filing a lawsuit that argues today’s broker rulemaking violates the Administrative Procedure Act and is unconstitutional. We stand with our nation’s innovators and will continue working to ensure the future of crypto – and DeFi – is here in the United States.”
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