The IRS announced new regulations on December 27, defining certain decentralized finance (DeFi) protocols as brokers and requiring them to fulfill customer identity verification (KYC) obligations, which has sparked 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 for potentially overstepping authority and infringing on constitutional rights. Alexander Grieve, Vice President of Paradigm, calls for the new 'crypto-friendly Congress' to pass the Congressional Review Act (CRA) to repeal this regulation. The Blockchain Association states that this rule is 'the last-ditch effort to push the U.S. crypto industry overseas' and says it will take action against it.