Three crypto industry groups – the DeFi Education Fund, the Blockchain Association and the Texas Blockchain Council – are suing the Internal Revenue Service to block new regulations requiring decentralized finance (DeFi) entities to report customer information .
The IRS has finalized crypto tax regulations as part of the Biden administration’s Infrastructure Investment and Jobs Act. The IRS says these new rules should help “close the information gap regarding digital assets.”
The lawsuit, on the other hand, claims that this approach would unduly burden “DeFi trading front-ends,” that is, essentially online platforms that allow users to access crypto protocols but do not perform necessarily transactions themselves. The suit objects to defining these front-ends as brokers, in part because “there is simply no broker-like entity involved in a decentralized transaction.”
Marisa Coppel, head of legal at the Blockchain Association, said in a statement that the new rules are “a violation of the privacy rights of individuals using decentralized technology” and would also “push all of this booming technology overseas.” “.
