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The US crypto industry has joined forces in the fight against new regulations, which, according to many industry representatives, can significantly harm its development. A coalition consisting of the Blockchain Association, the Defi Educational Foundation, and the Texas Blockchain Council has filed a lawsuit against the Internal Revenue Service (IRS) and the Treasury Department, challenging their recently adopted regulations for crypto brokers.
The essence of the claim
The lawsuit was filed in the U.S. District Court for the Northern District of Texas. The coalition claims that the new IRS rules violate the Administrative Procedures Act (APA) and go beyond the powers granted to these agencies. In particular, the rules require crypto brokers, including decentralized financial applications (DeFi) and wallet providers, to adhere to reporting standards similar to centralized exchanges.
The coalition emphasizes that such a broad definition of a "broker" endangers decentralized technologies, violates users' right to privacy, and may force the crypto industry to leave the United States.
The reaction and arguments of the crypto industry
Marisa Koppel, head of the legal department at the Blockchain Association, stated:
"The IRS and Treasury have gone beyond their established authority by expanding the concept of a broker to include decentralized platforms and interface providers, even if they are not involved in transactions. This not only violates the right to privacy, but also jeopardizes the entire rapidly evolving technology."
The Coalition emphasizes that the public actively opposed these norms during the period of public comments. Many experts pointed out the possible destructive impact of the rules on innovative technologies and their promotion in offshore jurisdictions.
Context and consequences
The IRS's innovations are expected to take effect by 2027. They affect a wide range of market participants, including DeFi applications that do not control user funds and operate without a centralized intermediary. These rules can significantly complicate the operational activities of such platforms, increasing the administrative burden.
Critics also point out that the rules upset the balance between regulation and innovation. Bill Hughes, a senior legal adviser at Consensys, previously predicted that this rulemaking would trigger a wave of lawsuits. He also suggested that Congress could step in and repeal these regulations, especially in the face of a change of administration.
What's next?
The trial may take a long time, but it will send an important signal to the crypto industry about the need to defend their rights. This situation highlights a broader conflict between regulators and innovative technologies that is gaining momentum. The outcome of the case could set an important precedent that will determine the future of cryptocurrency regulation in the United States.