IRS’s DeFi Broker Rule Faces Backlash, Ripple CTO Highlights Risks

IRS’s new DeFi rule could undermine decentralization by imposing KYC requirements. The IRS’s “broker” definition conflicts with SEC and CFTC regulations in crypto. Ripple CTO warns that users may turn to unsafe, anonymous DeFi platforms. The IRS’s finalization of the second half of its controversial broker rule marks a significant shift in the regulatory landscape for decentralized finance (DeFi). Jake Chervinsky, the CLO of Variant Fund, stated that by the start of 2027, the rule would require a lot of DeFi front-ends to enforce Know Your Customer (KYC) processes for their users. This decision has sparked outrage in the crypto community, with critics arguing that the rule is an overreach of governmental power. Further, they stated that it violates constitutional rights, posing a threat to innovation in the DeFi space. IRS has finalized the second half of its broker rule, requiring most DeFi front-ends to KYC users starting in 2027. This unlawful rule is the dying gasp of the anti-crypto army on its way out of power. It must be struck down, either by the courts or the incoming administration. — Jake Chervinsky (@jchervinsky) December 27, 2024 The Rule’s… The post IRS’s DeFi Broker Rule Faces Backlash, Ripple CTO Highlights Risks appeared first on Coin Edition .