The IRS announced new regulations on December 27, defining certain decentralized finance (DeFi) protocols as brokers and requiring them to fulfill customer identification (KYC) obligations, triggering strong opposition from the crypto industry. The regulation is expected to affect up to 875 DeFi brokers and 2.6 million taxpayers.

Legal experts criticize the rule as exceeding authority and potentially infringing on constitutional rights. Alexander Grieve, Vice President of Paradigm, called on the new 'pro-crypto Congress' to repeal this regulation through the Congressional Review Act (CRA). The Blockchain Association stated that this rule is 'the last-ditch effort to push the U.S. crypto industry overseas' and indicated that it will take action against it.