Blockchain Association sues IRS over crypto broker rules
“Today we’re taking action, filing a lawsuit that argues today’s broker rulemaking violates the Administrative Procedure Act and is unconstitutional.”
The Blockchain Association is pushing back against the latest cryptocurrency regulatory move of the United States Internal Revenue Service (IRS) with a joint lawsuit.
On Dec. 27, the IRS issued final regulations requiring brokers to report digital asset transactions, expanding existing reporting requirements to include front-end platforms, such as decentralized exchanges (DEXs).
Set to take effect in 2027, the rules mandate that brokers disclose gross proceeds from sales of cryptocurrencies and other digital assets, including information regarding taxpayers involved in the transactions.
In response to the new rules, the Blockchain Association and the Texas Blockchain Council filed a lawsuit against the IRS, announced Kristin Smith, the CEO of the Blockchain Association, in a Dec. 28 X post:
“Today we’re taking action, filing a lawsuit that argues today’s broker rulemaking violates the Administrative Procedure Act and is unconstitutional.”
“We stand with our nation’s innovators and will continue working to ensure the future of crypto – and DeFi – is here in the United States,” added Smith.
Under the new rules, if a decentralized finance (DeFi) platform facilitates the exchange or sale of digital assets — even through smart contracts — and exercises sufficient control or influence over the transaction process, it could meet the definition of a broker.
The IRS’ rulemaking puts “unlawful compliance burgers on software developers” building front-end trading infrastructure, wrote the Blockchain Association.
