👀Is KYC mandatory in the DEFI world? ❌💸

The Internal Revenue Service (IRS), the agency responsible for collecting taxes in the United States, has published a new regulation that requires decentralized finance (DeFi) platforms to implement user identification (KYC) procedures by 2027. According to the document, front-end trading service providers will be required to collect user identification information, report cryptocurrency and NFT holdings to tax authorities, and restrict services to those who do not comply with the new rules. 

The regulation defines a “front-end trading service” as any platform that “receives and processes digital asset sales orders for execution,” including decentralized exchanges such as Uniswap and PancakeSwap. The IRS’s stated goal is to increase tax compliance and reduce tax evasion associated with digital assets, reminding taxpayers that transactions involving these assets are taxable and must be reported on their income tax returns. The new regulations will come into effect for transactions made from January 1, 2025. 

🤑 Are you in favor of mandatory KYC in the DEFI world?