New Requirements for Brokers to Report Digital Asset Transactions
The United States Internal Revenue Service (IRS) has issued regulations that require brokers to report digital asset transactions. This expansion on existing requirements includes platforms like decentralized exchanges (DEXs). The rules will take effect in 2027, mandating brokers to disclose information about taxpayers involved in digital asset transactions. Additionally, the brokers will be required to report their gross proceeds from crypto and other digital asset sales.
Potential Impact on Decentralized Finance (DeFi) Platforms
With these new rules, DEXs could be treated as brokers if they facilitate the exchange or sale of digital assets and exercise sufficient control or influence on the transaction process. This development may have significant implications for the decentralized finance (DeFi) sector, potentially affecting the way transactions are conducted.
Blockchain Association Sues IRS Over Crypto Broker Rules
In response to the new IRS rules, the Blockchain Association and the Texas Blockchain Council filed a lawsuit against the IRS, arguing that the rules are unconstitutional. Kristin Smith, the CEO of the Blockchain Association, stated that they are taking action and standing with the nation’s innovators to "ensure the future" of crypto and DeFi in the US.
Argument Against the Rules
The organization argued that the rule violates the Administrative Procedure Act and risks crippling the digital asset space in the country. They believe that the new regulations will have far-reaching consequences, potentially limiting innovation and harming the growth of the industry.
Blockchain Association’s Position on the Lawsuit
The Blockchain Association is committed to protecting the rights of innovators and promoting a favorable regulatory environment for crypto and DeFi. By taking action against the IRS rules, they aim to ensure that the digital asset space continues to thrive in the US.
Turkey Introduces Stricter Crypto AML Regulations
Turkey has also introduced new crypto reporting rules to combat money laundering. Under the new regime, users transacting with more than 15,000 Turkish lira (approximately $425) must share their information with the country’s service providers. While bigger transactions are affected, the Turkish government stated that the new rule will not apply to crypto users transacting with amounts below the $425 threshold.
Timeline for Implementation
The new rule is set to take effect on February 25, 2025. This development highlights Turkey’s efforts to strengthen its anti-money laundering (AML) regulations in the crypto space.
Montenegro Justice Minister Approves Do Kwon’s Extradition to US
After the country’s constitutional court dismissed Do Kwon’s appeal, the Montenegrin Minister of Justice Bojan Božović approved Terraform Labs co-founder Do Kwon’s extradition to the United States. The decision follows a legal battle that took several turns, with extradition being reversed more than once.
Background on the Extradition Case
US and South Korean prosecutors have requested Kwon’s extradition to stand trial for offenses in their jurisdictions. The appeal’s denial and the Ministry of Justice’s approval to extradite Kwon to the US should mark the end of the longstanding legal proceedings related to his extradition.
Hong Kong Stablecoins Bill Advances to Legislative Council
Hong Kong’s much-anticipated bill on stablecoins has moved on to the next stage, with its first reading before the Legislative Council. The bill must go through three readings before finally making it to the chief executive, who can sign it into law.
Implications for Stablecoin Issuers in Hong Kong
If the bill is signed into law, stablecoin issuers in Hong Kong will be mandated to obtain a license from Hong Kong’s central bank. Issuers must meet the Hong Kong Monetary Authority’s requirements to obtain the license. Before approving licenses, the regulator would evaluate the stablecoin, its issuer, controllers, reserve assets, and mechanisms for stabilizing its value.
Future of Crypto Regulations
The regulatory landscape surrounding crypto is constantly evolving. As governments and institutions continue to develop new rules and regulations, it is essential for industry participants to stay informed and adapt to these changes.
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Explore More Articles Like This
- Blockchain Association Sues IRS Over Crypto Broker Rules
- Turkey Introduces Stricter Crypto AML Regulations
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