The IRS has introduced a new rule that will significantly impact the decentralized finance (DeFi) landscape. Starting in 2027, DeFi platforms will be classified as brokers, requiring them to collect and report user trading data to the IRS, including names, addresses, and transaction details.
Industry Pushback:
This rule has faced strong opposition from the crypto industry. Leading figures like Uniswap's CEO and CLO argue that it is impractical and harmful for decentralized platforms. They contend that the rule creates significant compliance burdens without offering any clear benefits. Critics argue that the decentralized nature of DeFi makes it difficult to comply with traditional broker regulations.
Impact on Investors:
For crypto investors, this rule could lead to increased transparency and potentially higher costs for DeFi platforms. While improved tax reporting might be a positive outcome, the compliance burden could force some smaller platforms to relocate or make significant changes, potentially disrupting the DeFi ecosystem.
December 2024, Cryptoniteuae