The U.S. Treasury Department and the Internal Revenue Service (IRS) officially released new tax regulations for decentralized finance (DeFi) brokers this week, requiring the reporting of total earnings from digital asset transactions starting in 2027. Although the new regulations have been finalized, their future implementation is not set in stone. (Background: Michael Saylor: Trump really wants to build a Bitcoin reserve! Has met with the new government team multiple times) (Background Supplement: Full text of the "U.S. Bitcoin Strategic Reserve" executive draft: Managing BTC as a permanent national asset) The U.S. Treasury Department and IRS released the final version of the regulations on Friday (27), which will require "decentralized finance (DeFi) brokers" to report total earnings from digital asset sales starting January 1, 2027, in order to strengthen tax compliance and narrow the tax gap. The new regulations clearly define the scope of brokers, covering various types of service providers in cryptocurrency trading, particularly refining the tax reporting obligations for decentralized finance (DeFi) participants. New Regulations for DeFi Brokers: Analysis of Obligations, Scope, and Exceptions Broker Reporting Obligations According to KOL @Phyrex_Ni, in the future, all DeFi brokers will need to submit information reports to the IRS (such as Form 1099-B), which should include the following information: Total Transaction Revenue: The total earnings amount from digital asset transactions. Information on Both Parties: Including basic information such as identity and address. Transaction Details: The asset transfer price and the basis cost must be recorded. Expansion of Broker Scope The new regulations clearly define brokers, including individuals and organizations that serve digital asset trading, encompassing but not limited to: Transaction matching service providers. Market makers. Order matching service providers. Enterprises providing custodial or custodial services, especially in DeFi, intermediaries participating in digital asset trading, such as major entry websites or protocol front-end service providers involved in digital asset transfers, will also be considered brokers. Exceptions The following categories are not subject to broker reporting obligations: Participants solely responsible for verifying transactions (e.g., validators). Suppliers that only provide hardware or software for managing digital asset private keys. Other participants who do not directly engage in facilitating transactions or do not have access to transaction details. The backlash within the cryptocurrency industry continues, with lawyers revealing: There is still room for negotiation. Following the release of the new regulations, widespread criticism erupted within the cryptocurrency industry, with the regulation requiring "KYC for DeFi" considered absurd. In fact, Alex Thorn, head of research at Galaxy Digital, pointed out last year the three choices the DeFi industry may face: DeFi services and applications can choose to comply with IRS reporting requirements: First: Accept the identity of a broker; Second: Attempt to prevent U.S. users from using their services; Third: Abandon upgrades and income generation from smart contracts. DeFi applications that do not provide front-end websites, do not support upgrades, and do not charge consideration (i.e., do not charge fees) from the disposal of digital assets may be exempt from being classified as brokers in the proposal. In other words, extremely decentralized applications cannot obtain relevant information and therefore cannot meet the reporting requirements for brokers. Although the new regulations have been finalized, their future implementation is not guaranteed; according to procedures, the new regulations may face congressional review, especially after the new members of Congress take office, who have the power to re-examine and veto, with past successful cases, such as Congress voting this year to veto the SAB 121 rule for the accounting treatment of digital assets. Consensys lawyer Bill Hughes criticized the timing of the new regulation's release on platform X and explained: First, a lawsuit will be filed, alleging that the rule exceeds the Treasury's authority and violates the Administrative Procedure Act. Subsequently, the rule may enter congressional review, at which point Congress can veto the rule, just as it did with the vote on SAB 121 this year. The outgoing government is not leaving quietly; this struggle continues. 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