The post Blockchain Association files lawsuit against IRS over its new DeFi regulations appeared on BitcoinEthereumNews.com.

The Blockchain Association has filed a lawsuit against the Internal Revenue Service (IRS) over its new regulations for the decentralized finance (DeFi) sector. The group is fighting against new IRS laws that will classify some protocols in the DeFi sector as brokers. The new regulation will mandate the protocols to give up user transaction details through the Know Your Customer (KYC) information. According to the IRS, the new regulation could affect about 875 DeFi protocols, a move that has triggered the entire crypto community. The new law intends to treat any platform that traders buy and sell assets in the DeFi sector as a broker. Legal experts strongly oppose the move, citing several constitutional rights violations. Investors are also wary about the security issues that the proposed KYC details may present. Blockchain Association files lawsuit to counter the IRS The initial IRS directive was met with market-wide dissatisfaction, with traders objecting to the regulations. In response to their dissatisfaction, the IRS said it will ensure that the right people are paying their taxes promptly. With the controversy still in the air, the Blockchain Association announced that it has filed its lawsuit challenging the new regulation. Today, @BlockchainAssn, @fund_defi, and @TXblockchain_ filed a lawsuit challenging the IRS’ broker rulemaking. This rule – as the countless comment letters warned – risks crippling the U.S. digital asset sector.https://t.co/D8VsDpNJvW pic.twitter.com/8HDvpIhBHC — Blockchain Association (@BlockchainAssn) December 28, 2024 According to its post on X (formerly Twitter), the Blockchain Association said it filed the lawsuit in collaboration with the DeFi Education Fund and the Texas Blockchain Council. The body stated that the rule could threaten the booming digital asset sector in the United States. It also mentioned that the same warnings had been communicated to the IRS through countless comment letters. According to the legal head…

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Filed under: News - @ December 28, 2024 12:20 pm