The United States Internal Revenue Service (IRS) issued regulations requiring brokers to report digital asset transactions, expanding on existing requirements to include platforms like decentralized exchanges (DEXs).
Once the rules take effect in 2027, brokers will be required to disclose information about taxpayers involved in digital asset transactions. The brokers will also be required to report their gross proceeds from crypto and other digital asset sales.
With the new rules, DEXs could be treated as brokers if the decentralized finance (DeFi) platform facilitates the exchange or sale of digital assets and exercises sufficient control or influence on the transaction process.
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Blockchain Association sues IRS over crypto broker rules
In response to the new IRS rules, the Blockchain Association and the Texas Blockchain Council filed a lawsuit against the IRS, arguing that the rules are unconstitutional.
Kristin Smith, the CEO of the Blockchain Association, said that they are taking action and are standing with the nation’s innovators to “ensure the future” of crypto and DeFi in the US.
The organization argued that the rule violates the Administrative Procedure Act and risks crippling the digital asset space in the country.
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Turkey introduces stricter crypto AML regulations
Turkey also introduced new crypto reporting rules to combat money laundering. Under the new regime, users transacting with more than 15,000 Turkish lira (about $425) must share their information with the country’s service providers.
While bigger transactions are affected, the Turkish government said the new rule will not apply to crypto users transacting with amounts below the $425 threshold. The new rule is set to take effect on Feb. 25, 2025.
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Montenegro justice minister approves Do Kwon’s extradition to US
After the country’s constitutional court dismissed Kwon’s appeal, the Montenegrin Minister of Justice Bojan Božović approved Terraform Labs co-founder Do Kwon’s extradition to the United States.
The decision to extradite the former crypto executive to the US follows a legal battle that took several turns, with extradition being reversed more than once. US and South Korean prosecutors have requested Kwon’s extradition to stand trial for offenses in their jurisdictions.
The appeal’s denial and the Ministry of Justice’s approval to extradite Kwon to the US should mark the end of the longstanding legal proceedings related to his extradition.
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Hong Kong stablecoins bill advances to the Legislative Council
Hong Kong’s much-anticipated bill on stablecoins has moved on to the next stage, with its first reading before the Legislative Council. The bill must go through three readings before finally making it to the chief executive, who can sign it into law.
If the bill is signed into law, stablecoin issuers in Hong Kong will be mandated to obtain a license from Hong Kong’s central bank. Issuers must meet the Hong Kong Monetary Authority’s requirements to obtain the license. Before approving licenses, the regulator would evaluate the stablecoin, its issuer, controllers, reserve assets and mechanisms for stabilizing its value.
Only licensed stablecoin issuers will be allowed to offer stablecoins in the Hong Kong market when the law is enacted.
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