Industry reports, announcements from DeFi platforms, or major news outlets

U.S. Treasury Finalizes 115-Page Rule Requiring DeFi Front-Ends to Report User Data Starting 2027

Dec 27, 2024, 05:27 PM

During a year-end rulemaking, the U.S. Treasury Department and the Internal Revenue Service (IRS) finalized 115 pages of new regulations requiring certain cryptocurrency brokers, including decentralized finance (DeFi) platforms, to collect and report user trading information to the IRS. The rules, published in the Federal Register on December 30, 2024, and set to take effect on January 1, 2027, classify many DeFi front-ends as brokers, compelling them to implement Know Your Customer (KYC) procedures and report gross proceeds from digital asset transactions, including NFTs and stablecoins. The regulations apply to both U.S. and non-U.S. persons. The crypto industry has reacted strongly, criticizing the rules as burdensome, potentially unconstitutional, and a threat to DeFi innovation. Industry leaders and organizations are calling for the new Congress to review the regulations through the Congressional Review Act and consider legal challenges to overturn them.