IRS DeFi Regulation Uncertainty After Congressional Repeal
by aria-crypto.com
March 14, 2025 at 14:25
IRS DeFi Regulation Uncertainty After Congressional Repeal
Congress has recently taken measures easing regulatory pressures on the decentralized finance (DeFi) sector by repealing a burdensome IRS rule. This rule, initiated by the IRS in December 2024 and set to be active in 2027, mandated DeFi protocols to report detailed transaction and taxpayer information, sparking widespread privacy concerns within the industry. High-level support for overturning the rule came promptly, with both bipartisan approval in the House and an endorsement from President Trump, ensuring swift action on his part. Despite this legislative relief, the future regulatory landscape for DeFi remains ambiguous, especially regarding how privacy and compliance can coexist. Industry advocates fear stringent regulations could drive DeFi operations offshore, while others see an opportunity for a harmonious balance between regulation and user privacy through innovative solutions like zero-knowledge proofs. As lawmakers and industry figures continue to debate, a clear regulatory framework for DeFi still seems distant, requiring careful consideration of both technological capabilities and privacy protections.
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