cryptojournalist
New IRS Rules Require More Reporting
The IRS recently introduced new rules that will require brokers to report digital asset transactions, including those on decentralized platforms like decentralized exchanges (DEXs). Starting in 2027, these rules will mandate brokers to disclose details of cryptocurrency sales, including the parties involved and the gross proceeds.
The Lawsuit Against the IRS
In response, the Blockchain Association and the Texas Blockchain Council have filed a lawsuit against the IRS. They argue that the new rules exceed the IRS’s authority and violate the Administrative Procedure Act. Kristin Smith, CEO of the Blockchain Association, said the lawsuit aims to protect the future of crypto and decentralized finance (DeFi) in the U.S.
Concerns Over DeFi and Privacy
One of the major concerns is that the IRS now considers DeFi platforms, which use smart contracts to facilitate trades, as brokers if they have enough control over transactions. This could place significant compliance burdens on software developers who create decentralized platforms.
Legal experts also argue that the rules infringe on the privacy rights of DeFi users. Marisa Coppel, Head of Legal at Blockchain Association, stated that the rules could drive DeFi innovation out of the U.S.
Impact of the New Rules
The IRS estimates that between 650 and 875 DeFi brokers, and up to 2.6 million U.S. taxpayers, will be affected by the new regulations. Brokers will need to start collecting and reporting transaction data in 2026.
