news 
IRS and Treasury Finalize DeFi Broker Regulations, Market Experts Decry ‘Overreach’
The U.S. Department of the Treasury has officially finalized regulations classifying decentralized finance (DeFi) platforms as traditional brokers, imposing stricter obligations on them to store and report user transaction data similarly to market brokers under their new regulations.
Under these revised guidelines, digital asset brokers must comply with new Internal Revenue Service (IRS) regulations by January 1, 2025. This development means users will start receiving Form 1099 for their profits, making them subject to taxation.
The Treasury Department and IRS have jointly released a tax reporting framework that affects the rapidly growing DeFi sector. The newly introduced provisions aim to clarify the regulatory landscape surrounding the industry, which has seen significant growth in recent years.
However, these regulations have been met with mixed reactions from within the market itself. Industry leaders are anticipated to express similar opposition this time around as well, as they did when the initial tax proposal was put forth by the agency last year.
Jake Chervinsky, chief legal officer at Variant Fund, has criticized the regulation as “illegal” and referred to it as the “dying gasp” of the anti-crypto faction losing its grip on power. He emphasized that the regulation must be struck down, either through judicial intervention or by the incoming administration taking a different stance.
On the other hand, Bill Hughes, senior attorney at Consensys, believes that the outgoing administration will encounter resistance in implementing these new rules. This is due to Congress having the authority to reject them, particularly regarding the repeal of Staff Accounting Bulletin (SAB) 121.
Some have expressed optimism about Scott Bessent potentially becoming Treasury Secretary under a hypothetical Trump presidency. This could lead to a more crypto-friendly approach from his administration and less opposition from regulatory bodies.
DeFi IRS
Source: www.crypto-news-flash.com
