Blockchain Associations Challenge IRS Regulations in Court – BitRss

The Blockchain Association and the Texas Blockchain Council filed a lawsuit against the Internal Revenue Service (IRS) on December 27, opposing new cryptocurrency regulations. These regulations mandate brokers, including decentralized exchanges (DEXs), to report cryptocurrency transactions. This has sparked significant debate within the blockchain industry.

New Regulations May Negatively Impact DeFi

Kristin Smith, CEO of the Blockchain Association, argued that the IRS regulations violate constitutional rights and the Administrative Procedure Act. She stated that the IRS imposes “illegal compliance burdens” on front-end trading infrastructure developers, potentially leading to adverse effects on the industry. Smith contended that the regulations misinterpret the operations of DeFi platforms, imposing unnecessary regulatory pressure on developers.

The new regulations expand the IRS’s definition of “broker” to include platforms that facilitate digital asset exchanges. This includes transactions conducted via smart contracts. Blockchain advocates warn that this definition could violate the privacy of DeFi users. Legal experts are also concerned that these regulations could stifle innovation wit…