Blockchain Association Sues IRS Over Digital Asset Reporting Rules
The Internal Revenue Service (IRS) has introduced new regulations requiring brokers to report digital asset transactions, including those conducted on decentralized platforms like decentralized exchanges (DEXs). These rules, effective in 2027, mandate brokers to disclose taxpayer information and report gross proceeds from crypto and digital asset sales.
Key Points:
- New IRS Reporting Requirements: Brokers will be required to disclose information about users involved in digital asset transactions and report proceeds from crypto sales.
- Impact on DEXs: Decentralized finance (DeFi) platforms, such as DEXs, may be classified as brokers if they facilitate transactions and exert control over the process.
Blockchain Association Files Lawsuit:
In response to these regulations, the Blockchain Association and the Texas Blockchain Council have filed a lawsuit against the IRS, claiming that the rules are unconstitutional.
Concerns Raised: The Blockchain Association argues that the regulations violate the Administrative Procedure Act and could have a detrimental effect on the digital asset space in the U.S. Kristin Smith, CEO of the Blockchain Association, emphasized their commitment to safeguarding the future of crypto and DeFi in the country.
Other Crypto Regulatory Developments:
Turkey’s Stricter AML Rules: Turkey has introduced new anti-money laundering (AML) regulations requiring users transacting over 15,000 Turkish lira (around $425) to provide personal information. The new rule will take effect on Feb. 25, 2025.
Montenegro Approves Do Kwon’s Extradition: Montenegro’s justice minister approved the extradition of Do Kwon, co-founder of Terraform Labs, to the U.S. to stand trial for charges related to his crypto activities.
Hong Kong’s Stablecoin Bill Advances: Hong Kong’s stablecoin legislation has moved forward, requiring stablecoin issuers to obtain licenses from the Hong Kong Monetary Authority to operate legally in the region.
These developments highlight increasing global regulatory efforts to tighten controls on the crypto industry while raising concerns from industry leaders about the impact on innovation and growth.
