Source: COINTELEGRAPH, Ciaran Lyons

Uniswap chief legal officer says IRS rules on decentralized finance (DeFi) brokers “absolutely should be challenged,” while a Consensys lawyer believes , the regulation was “deliberately chosen to be issued on the last Friday of 2024, in the middle of the holiday period.”

Crypto industry executives and legal professionals are skeptical that new IRS rules requiring decentralized exchanges to comply with the same reporting requirements as traditional brokerage firms will last. .

“There is no shortage of avenues to challenge this provision, and it absolutely should be challenged,” Catherine Minarik, chief legal officer of decentralized crypto exchange Uniswap, said in a Dec. 27 statement. Said in the X post. Executives hope the rule will be struck down .

"This does look like the IRS is saying they are regulating 'any service that facilitates a transaction' as a brokerage... and then goes on to classify decentralized finance (DeFi) technology as a brokerage... because it "Only involved in one part of the transaction... As the IRS's own description explains," Uniswap CEO Hayden Adams said he hoped the regulation would be enforced under the Congressional Review Act. was rejected, and if that didn't work, he was optimistic that the provision wouldn't withstand a "legal challenge."

On December 27, the IRS issued final rules requiring broker-dealers to report digital asset transactions, expanding existing reporting requirements to include front-end platforms such as Decentralized exchange.

Source: Xie Han

The regulations are scheduled to be implemented in 2027 and require brokers to disclose cryptocurrencies and other digital assets. Total proceeds from the sale, including information about the taxpayers involved in the transaction. The final rule states: “Only decentralized finance (DeFi) participants that are considered brokers are […] transaction front-end service providers.”

Robin, CEO of crypto tax platform Koinly Singer told Cointelegraph that implementing the necessary reporting systems could be very costly.

Singh said: “For companies operating in the decentralized finance space, complying with these regulations requires both operational innovation and technological innovation.”

Singh added: “Decentralized platforms inherently lack the centralized structure required for traditional reporting, which creates Many companies pose significant obstacles. ”

Bill Hughes, a lawyer for blockchain development company Consensys, said from a revenue perspective, the regulation is “only costs, no benefits.” No gain”.

"Those who are leaving will not go quietly. The fight will continue," Hughes said in a December 27 X post.

The regulations will require front-end platforms to track and report U.S. and global users, Hughes said, and apply to the sale of all digital assets, including non-fungible tokens (NFTs) and stablecoins.

Taking a similar view to Uniswap’s Adams, Hughes said the rule will likely be scrutinized by Congress “and potentially vetoed.”

“This rule has obviously been in the works for some time. They deliberately chose to announce it on the last Friday of 2024, in the middle of the holiday period.”