Will this new regulation pose challenges for users participating in the DeFi market in 2027?

On July 9, 2024, the U.S. Department of the Treasury issued final regulations requiring custodial brokers to report transaction information for assets they manage on behalf of their clients. Additionally, they warned that similar regulations would be applied to non-custodial brokers in the future.

On December 27, 2024, the U.S. Department of the Treasury officially announced regulations applicable to DeFi, focusing on trading front-end services that enable individual investors to interact with DeFi protocols.
According to the plan, these regulations will take effect on January 1, 2025. Starting in 2027, brokers will be required to disclose information on the total proceeds from the sale of cryptocurrencies and other digital assets, including details related to taxpayers involved in such transactions.
The IRS has analyzed DeFi operations into three distinct layers:
Interface Layer: Where users interact directly, such as trading applications or digital wallets.Application Layer: Where transaction logic is processed, such as smart contracts or DeFi protocols.Settlement Layer: Where actual transactions are executed and recorded on the blockchain.
Although there have been objections arguing that applying traditional securities trading models as a reference is inappropriate due to the significant differences between DeFi and securities trading, the IRS maintains that this model is useful in understanding and defining the fundamental steps of transactions.

According to the IRS, these regulations simply treat DeFi like any other industry, asserting that similar rules have been applied to brokers for over 40 years.

"The Treasury Department and the IRS disagree with the notion that these final regulations show bias against the DeFi industry or that they will discourage the adoption of this technology by law-abiding customers."

-- The IRS stated that... --
The new regulations will apply to digital asset transactions starting in 2027. Brokers will be required to begin collecting and reporting necessary data for digital asset transactions starting in 2026. According to the IRS, between 650 and 875 DeFi projects are expected to be affected by these regulations.
"Reporting information by DeFi brokers under Section 6045 will lead to higher tax compliance, as income earned from digital asset transactions of taxpayers not routed through custodial brokers will become more transparent to both the IRS and the taxpayers."
-- The IRS emphasized that... --
The IRS only applies the reporting obligation to parties that are actually able to collect and provide useful transaction information, such as front-end trading platforms. Other parties that cannot or do not have access to important information will be exempt from this obligation.

Some users on X believe that the new regulations will make it more complicated to participate in the crypto market. They are concerned that transaction processes will be burdened with more regulations, and the requirement to pay taxes will add financial and procedural burdens. This could make participating in the market less straightforward, especially for individual users.

The altcoin market also reacted negatively to this news, with most projects experiencing a slight decline.

#NewsAboutCrypto #CryptoNewss #IRS #defi

🚨 JUST IN: 🇺🇸 IRS Requires Brokers to Report Digital Asset Transactions, Including Decentralized Exchanges, Starting in 2027 💼📊 $BTC $ETH $BNB
In a significant regulatory update, the IRS has announced that starting in 2027, brokers will be required to report digital asset transactions to the agency. This includes not only traditional centralized exchanges but also decentralized exchanges (DEXs), marking a major step toward greater oversight of the cryptocurrency space.
Key Details:
Expanded Reporting: Under the new rules, brokers—defined as entities that facilitate the buying, selling, or exchange of digital assets—will need to report a range of crypto transactions, including those conducted on decentralized platforms. This is the first time such comprehensive reporting will include DEXs, which have previously operated with less regulatory scrutiny.Improved Tax Compliance: The new reporting requirements aim to help ensure that taxpayers are reporting digital asset income accurately and complying with tax obligations. The move comes as part of the IRS's ongoing efforts to clamp down on potential tax evasion related to cryptocurrency transactions.Impact on the Crypto Ecosystem: This shift in regulation could have far-reaching consequences for the decentralized finance (DeFi) space, as decentralized exchanges and platforms will need to navigate the complexities of compliance and potentially alter their operations to accommodate reporting requirements.Timeline: Brokers and exchanges have until 2027 to prepare for these new reporting rules. This gives the industry some time to adapt, but also signals that further regulatory scrutiny is on the horizon for the crypto market.
What’s Next?
This move from the IRS signals that regulation of digital assets is tightening, with both centralized and decentralized platforms now under the tax authorities' radar. As the 2027 deadline approaches, crypto brokers and DeFi platforms will likely need to invest in new compliance measures, potentially changing the way they operate.
For investors, this is a reminder to stay on top of tax obligations as the IRS steps up enforcement in the crypto space.
Stay tuned for further updates! 💡#IRS #IRSUpdates #MarketRebound

The Blockchain Association is challenging the IRS's broker rules, advocating for a more nuanced approach that recognizes the unique characteristics of digital assets. 💡
What's at Stake? 🤔
The IRS's current guidance would require cryptocurrency brokers to report transactions, similar to traditional financial institutions. However, this one-size-fits-all approach fails to account for the complexities of blockchain technology. 🤖
The Blockchain Association's Stand 💪
The Association argues that the IRS's rules are:
Overly broad, capturing non-taxable transactions 📝
Technically unfeasible for many blockchain companies 🚫
Invasive, compromising user privacy 🔒
What This Means for You 🤝
A more balanced approach to regulation would:
Safeguard user privacy 🔒
Promote innovation in the blockchain space 💻
Ensure a level playing field for all industry participants 🏆
Stay Informed, Stay Ahead 📊
Follow us for the latest updates on this developing story! 👉
#BlockchainAssociation #IRS #BlockchainTechnology
#Crypto2025Trends

🔔 MARKET MOVING NEWS! (28/12/24)

1️⃣ IRS Issues Rules On Digital Asset Reporting, Says Front-Ends Are Brokers ‼️
#IRS
The United States Internal Revenue Service (IRS) has reportedly issued final regulations that require brokers to disclose gross proceeds from sales of cryptocurrencies and other digital assets, including information regarding taxpayers involved in the transactions. Notably, this also expands existing reporting requirements to include front-end platforms of decentralised exchanges (DEX). If implemented, front-end interfaces of popular DEXs like Uniswap may soon be mandated to conduct Know Your Customer (KYC) processes on its users. The new rules will begin to apply to digital asset sales starting in 2027. According to the IRS, there are between 650 and 875 estimated DeFi brokers that will be affected by these final regulations. It also estimates that the new regulations will affect up to 2.6 million taxpayers.

2️⃣ Crypto Industry Calls On Congress To Block New DeFi Broker Rules ▶️

The new IRS rules classifying front-end interfaces of DeFi protocols as brokers has reportedly triggered immediate backlash within the crypto industry, with calls for the incoming Congress to overturn the new rules. Notably, many legal experts have taken to social media to suggest that the IRS may be overstepping its authority and infringing constitutional rights.

Jake Chervinsky, chief legal officer at venture capital firm Variant stated,

This unlawful rule is the dying gasp of the anti-crypto army on its way out of power. It must be struck down, either by the courts or the incoming administration.

3️⃣ US-listed Bitcoin, Ether ETFs Tally $38.3B Net Inflows In Launch Year 📊

According to Farside Investors, United States spot Bitcoin exchange-traded funds (ETFs) and spot Ether ETFs recorded a staggering $35.66 billion and $2.68 billion in net inflows in 2024. Notably, spot BTC ETF inflows far exceeded early industry estimates. The top contributors to the net inflows are as follows; BlackRock’s iShares Bitcoin Trust ETF (IBIT) with $37.31 billion in net inflows, Fidelity Wise Origin Bitcoin Fund (FBTC) with $11.84 billion, ARK 21Shares Bitcoin ETF (ARKB) with $2.49 billion, and Bitwise Bitcoin ETF (BITB) with $2.19 billion. These net inflows smashed an earlier $14 billion first-year estimate from Galaxy Digital’s research head Alex Thorn.

4️⃣ Bitget To Burn 40% of Total Supply of BGB And Introduce Quarterly Burns 🔥

Crypto exchange Bitget has announced plans to burn 40% of the supply of its native token ‘BGB.’  It also stated that it will introduce quarterly burns of the BGB token by allocating 20% of profits from its exchange operations and its separate crypto wallet for this purpose. The token buy back and burn program is expected to start in 2025. Notably, the latest announcement follows a previous announcement that revealed it was going to merge the Bitget Wallet Token (BWB) with BGB. The company clarified that the merger will not affect the total supply of BGB.
#CryptoAMA #Crypto2025Trands

1. IRS Stands Firm on Staking Taxes 💸
The US IRS is doubling down on their stance that staking rewards are taxable income the moment you receive them. Joshua and Jessica Jarrett tried to argue that these rewards should only be taxed when you sell them, but the IRS isn’t budging. According to Revenue Ruling 2023-14, you gotta report your staking rewards as income based on their market value as soon as you can sell or trade them.

2. Botswana’s Central Bank Labels Crypto as Low-Risk but Wants Rules 🛡️
Botswana’s central bank has given crypto investments a thumbs-up as low-risk for now, thanks to their small local market. However, they’re pushing for regulations to keep potential digital asset risks in check down the line. As crypto gets more intertwined with the financial system, they want to make sure everything stays safe and sound.

3. Trump Appoints Ex-Football Player to Lead New Crypto Council 🏈➡️💼

Donald Trump has tapped former college football star Bo Hines to head his new “Presidential Council of Advisers for Digital Assets,” also known as the “Crypto Council.” Bo will team up with David Sacks, Trump’s pick for crypto and AI czar, to boost innovation and growth in the digital assets space. Fun fact: Bo ran for Congress in North Carolina back in 2022 but didn’t win.

💬 Join the Conversation!
Drop your thoughts and questions in the comments below. Let’s navigate the crypto world together! 🌐🚀
Stay tuned for more updates and keep riding the crypto wave! 🚀✨
#cryptonews #IRS #Botswana

The IRS is making big changes starting Jan 1, 2025, and if you don’t prep now, you could pay more in crypto taxes or face penalties. Here’s what you need to do before the year-end to avoid penalties, save money, and stay ahead of the game.

Understand Crypto Tax Basics

At a high level, the following transactions lead to taxable events.

• Selling crypto for fiat

• Trading one cryptocurrency for another

• Spending crypto on goods or services

• Earning crypto through staking, mining, or rewards

• Receiving airdrops or hard forks

If you have engaged in any of these activities in 2024, you will likely need to file Form 8949, Schedule D, or Schedule 1 with your taxes next year.

Non-taxable transactions include transfers between your own wallets or exchange accounts, and sending or receiving crypto gifts. Even though these are not taxable, you still need to track them for accurate record-keeping.

Use Crypto Tax Software

Today, most cryptocurrency exchanges don’t send you detailed tax forms like stock brokers. However, you are still responsible for accurately tracking and reporting your crypto gains and losses. Manually calculating crypto gains and losses is nearly impossible, especially if you have numerous transactions across multiple wallets & exchanges. You can use a reputed crypto tax software tool to automate this process.

Crypto tax software tools connect with your wallets and exchanges (read-only access), automatically calculate gains and losses, and generate necessary tax forms like Form 8949, Schedule D, Schedule 1, and other reports you need to submit with your tax return.

Set Aside Funds for Taxes

Made crypto profits this year? Congratulations! But remember, the IRS expects a cut of those gains.

A good rule of thumb is to set aside 25% - 30% of your profits in cash or stablecoins to cover the upcoming tax bill. (In some cases, these percentages can be as high as 37%)

If you have profited over $100,000 in crypto, consider hiring a qualified CPA to project your tax liability. This will ensure you are not caught off guard when tax season rolls around.
Harvest Crypto Losses to Offset Crypto Gains
If some of your investments are underwater (the market value is below how much you paid for the investment), you can consider selling these positions before the year-end to harvest losses. These losses can help you offset current-year crypto gains and even carry forward these losses to the future in some cases. Make sure to tax loss harvest before December 31, 2024, to take advantage of the strategy and reduce your 2024 tax bill.

Switch to the Per-Wallet Tracking Method

Starting January 1, 2025, the IRS will no longer allow the Universal cost basis tracking method for crypto assets. Instead, you must use the Per-wallet method. (Rev. Proc. 2024-28)

Here’s the difference:

• Universal Method: Assumes you have one giant wallet. You could sell crypto from one wallet but report it as sold from another to minimize taxes. Ex: Wallet A and Wallet B have 1 BTC each. You sell 1 BTC at wallet B. For tax purposes, you can say you sold the BTC at Wallet A.

• Per-Wallet Method: Requires you to report transactions based on the specific wallet used. Ex: Wallet A and Wallet B has 1 BTC. You sell 1 BTC at wallet B. For tax purposes, you can only say you sold the BTC at Wallet B.

If you have been using the Universal method, make sure to transition into Per-wallet method by December 31, 2024, to stay compliant. Ignoring this change could result in penalties in the future.
#CryptoTaxes2025
#IRS $BTC
$XRP
$BNB

Por: Gustavo Bertolucci 13/12/2024 09:45
Investidor pioneiro de bitcoin pega dois anos de prisão por não declarar lucros para receita
Além da prisão, investidor terá de pagar uma multa milionária para reembolsar os Estados Unidos. "Este caso marca o primeiro processo criminal por sonegação fiscal centrado exclusivamente em criptomoeda", disse agente da receita norte-americana.
A justiça condenou um investidor pioneiro de bitcoin a dois anos de prisão nos Estados Unidos, após ele não declarar seus lucros após a venda da moeda digital.
Como noticiado pelo Livecoins em setembro de 2024, Frank Richard Ahlgren III, residente de Austin, Texas, já havia confessado a culpa pela omissão da declaração.
Além disso, ele enfrentava um julgamento que poderia lhe condenar a três anos de prisão. Com a decisão da última quinta-feira (12), ele deverá cumprir apenas dois em regime fechado, além de mais um ano de liberdade supervisionada nos EUA.
Além de prisão por dois anos, investidor pioneiro de bitcoin deverá pagar multa para restituir os EUA
De acordo com apuração da reportagem, Frank Richard teve lucros de US$ 3,7 milhões com a venda de bitcoins nos últimos anos. Investidor desde 2011, quando Satoshi Nakamoto ainda estava presente nas discussões da tecnologia, Frank acumulou milhares de moedas.
Em 2015 ele voltou a comprar moedas, acumulando outros 1.366 BTCs, e guardou seu bem digital até 2017. Isso porque, em outubro daquele ano, ele resolveu comprar uma casa e liquidou boa parte de suas moedas na corretora Coinbase.
Ao declarar que havia comprado o bitcoin por um preço mais alto do que realmente pagou, ele enviou falsas declarações para o IRS, a receita dos EUA. Assim, ele passou a ser processado pelo estado.
“Frank Ahlgren III ganhou milhões comprando e vendendo bitcoins“, disse o procurador-geral adjunto interino Stuart M. Goldberg da Divisão de Impostos do Departamento de Justiça. “Mas em vez de pagar os impostos que sabia que eram devidos, ele mentiu para seu contador sobre a extensão de uma grande parte de seus ganhos e tentou esconder outra parte de seus lucros por meio de técnicas sofisticadas projetadas para obscurecer suas transações no blockchain do bitcoin. Essa conduta hoje lhe rendeu uma sentença de dois anos.”
Agora, ele terá de cumprir dois anos de prisão em regime fechado, mais um de liberdade supervisionada. Por fim, sua condenação ainda impõe que ele deverá pagar uma multa de US$ 1.095.031 em restituição aos Estados Unidos.
“Ele acreditava que transações não tinham rastreio”, diz agente da receita que chamou o caso de primeira prisão por sonegação fiscal envolvendo criptomoedas dos EUA
Ao comentar sobre o caso, a agente encarregada do IRS que investigou o caso de Frank lembrou que ele acreditava que suas transações não estavam sob olhar atento do fisco.
“Ahlgren cumprirá pena porque acreditava que suas transações de criptomoeda eram irrastreáveis. Este caso demonstra que ninguém está acima da lei. Minha equipe na Investigação Criminal do IRS tem a experiência e as ferramentas para rastrear atividades financeiras, seja envolvendo dólares, pesos ou criptomoedas“, disse a agente especial interina encarregada Lucy Tan do escritório de campo de Houston do IRS-Criminal Investigation (IRS-CI). “Este caso marca o primeiro processo criminal por sonegação fiscal centrado exclusivamente em criptomoeda. Como os preços das criptomoedas são altos, também é alta a tentação de não pagar impostos sobre sua venda. Evite a tentação e evite a prisão federal.”
O novo alerta com a prisão do investidor pioneiro de bitcoin condenado a prisão mostra que autoridades estão atentas a tecnologia.
"Um grande alerta para nós investidores sejam sardinhas ou baleias"
Fonte da materia: Livecoins
[Este artigo é para fins de conscientização e orientação financeira, para mais informações consulte um contador(a) ou profissional responsável por essa área.]
#irs #receita_federal #declararcriptomoedas #BinanceSquareFamily #binance
$BTC