The Blockchain Association has filed a lawsuit against the U.S. Internal Revenue Service (IRS) due to new rules in the decentralized finance (DeFi) sector. The association claims that the new regulations infringe on user rights and could harm the growing digital asset sector.
Reasons for the Lawsuit and Main Concerns
The association argues that the new rules classify certain DeFi protocols as brokers, requiring them to provide user transaction data through a Know Your Customer (KYC) mechanism. According to IRS data, this could affect about 875 DeFi protocols, sparking widespread repercussions in the crypto community.
Opinions of Legal Experts and Investors
Legal experts have expressed serious concerns about the new rules, citing constitutional rights violations. Cryptocurrency investors are also concerned about potential security threats posed by the proposed KYC data.
Criticism from the Crypto Community
Executives and crypto community members, including Kristin Smith from the Blockchain Association, condemned the IRS actions. They urged the incoming administration to overturn these rules, referencing the threat to innovation in the U.S.
The lawsuit and criticism from the crypto community underscore the importance of respecting user rights when introducing new regulatory measures in the digital asset space. Legislative or judicial intervention is expected to be decisive.
