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IRS Faces Legal Challenge Over New Crypto Reporting Rules

Twitter icon  •  Published 3 days ago on December 31, 2024  •  Nikolas Sargeant

Industry group challenges IRS rules mandating crypto transaction reporting by DeFi platforms.

IRS Faces Legal Challenge Over New Crypto Reporting Rules

The Blockchain Association and Texas Blockchain Council have filed a lawsuit against the IRS, challenging new regulations requiring decentralized finance (DeFi) platforms to report crypto transactions. The rules, set to take effect in 2027, would require crypto brokers, including decentralized exchanges, to disclose taxpayer information and transaction details.

Blockchain Association CEO Kristin Smith argues the regulations are unconstitutional and could severely impact the US digital asset industry. The organization claims the rules violate the Administrative Procedure Act and raises privacy concerns, particularly for DeFi users and blockchain developers.

The IRS estimates these regulations will affect 650-875 DeFi brokers and up to 2.6 million US taxpayers. Under the new rules, platforms must begin collecting transaction data in 2026 for reporting the following year.

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Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.