IRS Ensnared in Legal Battles Over Restrictive Crypto Broker Definitions
by aria-crypto.com
December 29, 2024 at 12:37
IRS Ensnared in Legal Battles Over Restrictive Crypto Broker Definitions
The Blockchain Association, along with the Defi Education Fund and the Texas Blockchain Council, has launched a lawsuit challenging the IRS's recently imposed crypto 'broker' regulations, terming them unconstitutional and an overreach of authority. Set to be enforced by 2027, these regulations broadly classify various cryptocurrency entities, including decentralized platforms and wallet providers, as brokers. This expanded definition could impose unprecedented compliance burdens equivalent to those required by traditional exchanges. Critics argue that such measures could severe the innovative drive in the U.S. cryptocurrency sector and push DeFi operations offshore. The lawsuit, filed in the U.S. District Court for the Northern District of Texas, contends that this IRS action violates the Administrative Procedure Act. With industry-wide opposition to these rules, key figures anticipate congressional oversight to contest the measures under future administration. Facing potential setbacks, the crypto community fears an increase in legal challenges similar to the indictment of Tornado Cash developer, impacting numerous DeFi entities and millions of U.S. taxpayers.
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