The United States IRS has announced new regulations that will come into effect in 2027, subjecting DeFi brokers to the same tax reporting obligations as traditional financial institutions.
The U.S. Internal Revenue Service (IRS) has released its final rules regarding tax regulations for the decentralized finance (DeFi) sector. The new regulations require DeFi brokers that process cryptocurrency transactions to report gross revenues and provide Form 1099s to clients, which include their name, address, and transaction information.
The regulation covers organizations that provide access to decentralized protocols and front-end service providers that interact directly with users.
However, the protocols themselves are exempt from these obligations. These new rules aim to subject DeFi brokers to the same tax reporting standards as traditional securities brokers.
The new regulations will come into effect on January 1, 2027, and are expected to significantly impact cryptocurrency investors and the DeFi ecosystem. This could contribute to greater regulatory compliance and transparency in the industry.
Altcoin prices are falling
Following these statements by the IRS, altcoin prices such as Uniswap, Pancakeswap and Jupiter saw decreases of up to 6%.
These declines were always due to both the general negative trend in the market and these statements targeting the DeFi sector.
Stay tuned