According to ChainCatcher news, recently, the IRS's reporting rules have classified DeFi front-ends as brokers, which has impacted the crypto industry. It is reported that the U.S. Department of the Treasury and the IRS received over 44,000 comments after proposing the rule.
Galaxy Digital Research Director Alex Thorn outlined three potential options for DeFi if IRS rules are not rescinded. He indicated that DeFi services and applications could comply with IRS reporting requirements and accept broker designation, attempt to block users from the U.S., or abandon smart contract upgrades and revenue generation.
Thorn wrote: "Under this proposal, DeFi applications without a front-end website, possessing non-upgradable contracts, and not charging any 'consideration' (i.e., not charging any fees) during the disposal of digital assets can be exempt from being designated as 'brokers'. In other words, highly decentralized applications cannot be aware of the situation and therefore cannot comply with broker reporting requirements."