Outside Source
The Blockchain Association, representing 76 crypto firms, urges Congress to repeal the IRS DeFi broker rule, arguing it threatens US crypto innovation and unfairly burdens blockchain firms.
News
The Blockchain Association, representing 76 cryptocurrency organizations, has called on congressional leaders to support Senator Ted Cruz in repealing the Internal Revenue Service’s (IRS) decentralized finance (DeFi) broker rule.
On Feb. 19, the Blockchain Association sent a letter to Senate Majority Leader John Thune, Senate Minority Leader Chuck Schumer, House Speaker Mike Johnson and House Minority Leader Hakeem Jeffries to repeal an anti-crypto regulation finalized during the final days of the former President Joe Biden’s administration.
The letter was signed by major crypto organizations, including 0x Labs, a16z Crypto (Andreessen Horowitz’s crypto division), Aptos Labs, Crypto.com, Grayscale, Dapper Labs and Ava Labs.
A snippet of Blockchain Association’s letter for the members of Congress. Source: Blockchain Association.
Blockchain firms criticize Biden-era IRS
The letter advocates for supporting Senator Ted Cruz’s Congressional Review Act (CRA) resolution, S.J.Res. 3, which seeks to repeal a regulatory rule that expands the definition of a “broker” under US law to include software providers that enable access to DeFi protocols.
Related: Crypto industry calls on Congress to block new DeFi broker rules
Set to be implemented in 2027, the DeFi broker rule holds decentralized exchanges to the same reporting requirements as traditional brokers.
The IRS disclosed on Dec. 27, 2024, that the DeFi broker rules, if implemented, will affect up to 875 DeFi brokers in the US.
Industry warns of stifled innovation
The Blockchain Association argued that this rule imposes severe and unjustified burdens on American DeFi companies, threatens innovation in the digital asset sector and undermines US competitiveness in financial technology:
“Under the rule, software companies that never take custody or control of users’ assets will be required to radically rebuild their services in order to unnecessarily collect and then report to the government the personal identifying information and transaction details of potentially tens of millions of American users.”
In addition to the compliance burden, the rule unfairly targets US-based crypto companies and could “cripple DeFi innovation” in the US.
The Blockchain Association claimed that the rule was a “midnight rulemaking” effort and that Congress should make all decisions with such far-reaching consequences. The letter urged Congress to vote in favor of the CRA resolution to support DeFi innovation, economic growth, job creation and financial inclusion.
Magazine: MegaETH launch could save Ethereum… but at what cost?
This article first appeared at Cointelegraph.com News
