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IRS Targets DeFi: New Crypto Tax Rules to Shake Decentralized Platforms by 2027
The U.S. Internal Revenue Service (IRS) has recently introduced a new tax rule that will significantly impact decentralized finance (DeFi) brokers starting in 2027. The latest guideline requires DeFi platforms to collect and report user trading information, issue tax forms, and provide customer details like names and addresses for digital asset sales.
For crypto investors, this means increased transparency and potentially higher compliance costs for DeFi platforms. While the new rule may lead to better tax reporting, it could also push some smaller platforms to relocate or make significant changes, which may create temporary instability in the DeFi space.
The development is particularly concerning for the decentralized finance community, as it raises concerns about the potential impact on the industry’s growth and stability. The increased compliance requirements may result in higher fees and potentially even lead to some platforms exiting the market altogether.
According to Bill Hughes, a well-known expert in the field of cryptocurrency regulation, the new rule will require trading front ends to track and report user activity, both for U.S. persons and non-U.S. persons, starting from 2027. This includes the sale of every single digital asset, including non-fungible tokens (NFTs).
The introduction of these new tax reporting requirements may have significant implications on the DeFi industry as a whole. It remains to be seen how this development will affect the growth and development of decentralized finance initiatives.
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Disclaimer: This is a subjective article that expresses my own opinion.
Source: coinpedia.org
