The Blockchain Association, an American cryptocurrency advocacy group, has filed a comment letter broadly opposing the Internal Revenue Service's (IRS) proposed tax rules.
In a Nov. 13 letter, the Blockchain Association (BA) said the IRS's proposed August rulemaking process to regulate the sale and exchange of digital assets through intermediaries exceeds the government's authority and is a "fundamental misunderstanding. ", reflecting on the nature of digital assets and technology. "Decentralization." In August, the US Treasury Department published draft regulations aimed at addressing issues related to the reporting and payment of taxes on cryptocurrency transactions.
The Blockchain Association's criticism of the proposal included claims that many cryptocurrency participants would find it difficult to comply with the rules if enacted. The group said many participants in decentralized finance (DeFi) were "fundamentally unable" to agree to the proposed rules, which the BA said was a sign that the Treasury was overstepping its authority and potentially breaching constitutional privacy rights and freedom of expression. .
"Treasury needs more time to understand how damaging and ineffective the expanded intermediary definition is for US decentralized technology developers," said BA CEO Christine Smith. "Furthermore, the Treasury proposal would violate the privacy rights of individuals using decentralized technology."
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Since the draft was unveiled in August, many US lawmakers, industry leaders and legal experts have pondered what the proposal could mean for the future of cryptocurrency taxation in the country. Under the current draft, the proposed cryptocurrency reporting rules could take effect in 2026 for transactions in 2025.
Paul Grewal, Coinbase's chief legal officer, said in October that the regulations "could hurt a fledgling industry when it's just getting started." A group of U.S. senators backed the measure in writing and called for the rules to take effect by 2026.
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