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The Biden administration has finalized a sweeping new rule requiring cryptocurrency platforms to report all transactions to the Internal Revenue Service (IRS), sparking a fierce backlash from the industry.
As of December 30, 2024, digital asset brokers will be required to track and report all user activity, including non-fungible tokens (NFTs) and stablecoins. This move aims to close tax loopholes in crypto reporting and increase market transparency.
However, critics argue that the rule goes beyond the administration’s authority and may face legal challenges. Additionally, the timing of the announcement during the holiday season has raised eyebrows among industry professionals.
Senior Counsel Bill Hughes from Consensys emphasized that the regulation “applies to the sale of every single digital asset, including NFTs and even stablecoins.” He also expressed concerns about the potential legal battles that may ensue.
Noted crypto lawyer Jake Chervinsky described the rule as “unlawful” and an attempt by the current administration to restrict crypto innovations. He predicted that courts or the incoming administration will eventually overturn this regulation.
The new requirement is expected to significantly impact the cryptocurrency landscape in the United States, potentially leading to increased compliance costs for platforms and stifling innovation. On the other hand, proponents argue that this rule would promote transparency and level the playing field between digital and traditional financial markets.
As a result of these changes, crypto businesses are advised to reassess their compliance frameworks and prepare for potential regulatory shifts.
Source: www.crypto-news.net
