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IRS DeFi Broker Rule Sparks Backlash: Crypto Experts Weigh In
The Internal Revenue Service (IRS) has finalized a ruling that has sparked widespread backlash within the crypto community. The decision classifies certain front-end protocols facilitating digital asset transactions as brokers, prompting concerns about its potential impact on the decentralized finance (DeFi) ecosystem.
Industry experts have been vocal in their criticism of the new regulations, citing the need for clear boundaries and a more comprehensive approach to regulating technology beyond the crypto industry.
John Deaton, a pro-XRP lawyer, described the ruling as “awful and un-American.” He emphasized that this decision would stifle innovation and drive developers and projects overseas. The Blockchain Association, along with the DeFi Education Fund and Texas Blockchain Council, has filed a lawsuit challenging the IRS’ broker rulemaking. They argue that the regulation violates the Administrative Procedure Act and is unconstitutional.
In an interview, Uniswap’s Chief Legal Officer Katherine Minarik expressed doubts about the ruling’s sustainability, highlighting potential legal challenges ahead. She also emphasized the importance of establishing clear guidelines for regulating technology beyond the crypto industry.
Hayden Adams, CEO of Uniswap, has called on Congress to take action under the Review Act, stating that this unlawful rule is the “dying gasp” of the anti-crypto army exiting power. Similarly, Variant’s Chief Legal Officer Jake Chervinsky described it as a “final gasp.” Meanwhile, Alexander Grieve, Paradigm executive, urges Congress to nullify the ruling in the next year.
The recent move has also raised concerns about the potential consequences for decentralized finance (DeFi) and the broader cryptocurrency industry.
Source: cryptotale.org
