Recent news indicates that the U.S. has repealed a rule mandating decentralized exchanges (DeFi) to provide customer transaction data for taxation. This decision represents a significant shift for the crypto industry.
Controversial Tax Rule
The repealed rule (TD 10021, RIN 1545-BR39) required DeFi platforms to report detailed customer transaction data to the Internal Revenue Service under Section 6045 of the tax code.
Criticism and Its Implications
The rule faced widespread criticism from crypto advocates who argued that DeFi protocols, often automated and without traditional staff, were incapable of complying with such requirements. Critics also maintained that forcing decentralized platforms to collect and report tax data would stifle innovation and was technically unfeasible.
Future of Cryptocurrency Regulation
The repeal is viewed as a significant win for the crypto industry, which has long pushed back against regulatory approaches it sees as incompatible with decentralized technologies. The focus now shifts to how future crypto tax frameworks will be shaped to account for DeFi's unique structure.
The repeal of this controversial regulation raises new questions about the future of cryptocurrency taxation, particularly in the context of decentralized finance.
