The post IRS Targets DeFi: New Crypto Tax Rules to Shake Decentralized Platforms by 2027 appeared first on Coinpedia Fintech News
The U.S. Internal Revenue Service (IRS) has introduced a new tax rule that will affect decentralized finance (DeFi) brokers. Starting in 2027, DeFi platforms will have to collect user trading information, issue tax forms, and provide customer details like names and addresses. This rule is meant to make digital asset taxes similar to traditional ones.
However, some experts worry that this could be tough for decentralized platforms since they don’t have centralized entities to collect this data. This change is part of the 2021 Infrastructure Investment and Jobs Act, but it’s facing opposition from crypto groups.
Why Experts are Against the Rule?
Crypto industry leaders are pushing back against the IRS’s new rule that treats decentralized exchanges (DeFi platforms) like traditional brokers. Uniswap’s Chief Legal Officer, Katherine Minarik, and CEO, Hayden Adams, both argue that the rule should be challenged, with Adams hoping it will be rejected through the Congressional Review Act.
However, the rule, set to take effect in 2027, requires DeFi platforms to report user transactions and details about digital asset sales, creating potential compliance challenges for decentralized platforms that lack centralized structures.
Moreover, Legal experts like Bill Hughes from Consensys argue the rule offers “all cost, no benefit,” adding that it will create significant hurdles without offering clear advantages.
Treasury/IRS has finalized their DeFi broker tax reporting rule. Trading front ends would have to track and report on user activity – both US persons and non-US persons- starting in 2027. And it applies to the sale of every single digital asset – including NFTs and even… pic.twitter.com/CtFox668yn
— Bill Hughes : wchughes.eth
(@BillHughesDC) December 27, 2024
For crypto investors, this means more transparency and potentially higher compliance costs for DeFi platforms. While this could lead to better tax reporting, it may also push some smaller platforms to relocate or make changes, which could create temporary instability in the DeFi space.
Other Crypto News
As per the latest update, Do Kwon, the co-founder of Terraform Labs, will be extradited to the U.S. after Montenegro’s justice minister signed the order, following his arrest for using fake documents. Kwon faces charges related to the collapse of his crypto project.
Meanwhile, Bitcoin remains strong above $96,000, despite a dip from its all-time high, with $475 million flowing into Bitcoin ETFs, and investors exploring new opportunities in AI-driven tokens and DeFi projects. Experts remain optimistic about Bitcoin’s future.
In other news, Bitget plans to burn 40% of its BGB token supply to boost its value, and two new Bitcoin-focused ETFs are launching, reflecting the growing trend of companies adding Bitcoin to their balance sheets.
As an investor keep an eye on the latest crypto news to manage your crypto assets with ease.
