The U.S. Treasury has officially repealed the mandatory reporting regulation for cryptocurrency transactions for both decentralized and centralized platforms, avoiding a misapplication of traditional brokerage standards.
This regulation was controversial because it required DeFi protocols to report user data while having no control over wallets or personal information. The repeal reflects a regulation that aligns with the realities of technology development and privacy rights.
MAIN CONTENT
Regulation TD 10021 requiring DeFi to report transactions has been rejected by Congress and signed off by the President.
The cryptocurrency industry strongly opposed this, emphasizing that decentralized platforms cannot provide user data.
The U.S. Treasury continues to monitor crypto-related crimes and participates in international financial policy.
What is regulation TD 10021 and why was it repealed?
TD 10021, based on Section 6045 of the 2021 tax law, required cryptocurrency platforms to report transaction data like traditional brokerage firms. However, this regulation is not compatible with DeFi technology, where user data and wallets are not stored.
Thus, the U.S. Congress used the Congressional Review Act to completely repeal this regulation in April 2024. President Trump also officially approved this decision.
DeFi platforms cannot report data that they do not own; this regulation stifles open technology development in the United States.
– Miller Whitehouse-Levine, CEO DeFi Education Fund, 2024
What is the cryptocurrency industry's reaction to the expanded regulation?
Developers, privacy advocacy organizations, and policy experts strongly oppose it because the regulation requires even intermediary tools, which do not store or control wallets like wallet interfaces or token aggregators, to report.
They argue that this is an unrealistic requirement and an invasion of privacy, which could shift many activities overseas, reducing the competitiveness of the U.S. market in the cryptocurrency sector.
How will the U.S. Treasury continue to monitor cryptocurrencies after the repeal of the regulation?
Despite the repeal of regulation TD 10021, the Treasury, under the direction of Scott Bessent, continues to closely monitor criminal activities related to cryptocurrencies globally. In 2023 and 2024, they imposed sanctions on shadow financial network organizations in Iran and a North Korean hacking group.
At the same time, the Treasury participates in global financial tax policy coordination within the G7 framework and contributes to constructing trade agreements related to digital transactions.
We are committed to combating illegal finance related to cryptocurrencies while working with allies to adjust global tax policy accordingly.
– Scott Bessent, Director of the U.S. Treasury, 2024
What distinguishes the application of regulations between exchanges and DeFi?
The U.S. Treasury confirms that the reporting regulation only applies to centralized exchanges and intermediaries that have control over user assets like Coinbase or Binance US. Decentralized protocols and front-end developers are not subject to this law.
This helps maintain a clear distinction, protecting privacy as well as the openness and creativity of DeFi platforms while ensuring transparency for traditional financial services that are more susceptible to legal risks.
What are the impacts of repealing the regulation on the U.S. cryptocurrency market?
The repeal of TD 10021 has eliminated a significant legal barrier, encouraging cryptocurrency development projects to continue operating within the legal framework without imposing requirements on platforms that cannot comply.
According to a report from the DeFi Education Fund, this helps maintain an innovative environment, encouraging developers to stay in the U.S. instead of moving to more regulation-friendly regions.
Frequently Asked Questions
1. What is regulation TD 10021?
TD 10021 is a regulation that mandated cryptocurrency brokerage platforms to report user data to the IRS, approved in 2024 but has since been repealed.
2. Why can't DeFi comply with this reporting regulation?
DeFi platforms do not store user data or control wallets, so they cannot provide the information as required.
3. Does the repealed regulation apply to centralized exchanges?
Yes, centralized exchanges like Coinbase still have to comply with transaction reporting regulations to the IRS.
4. Will the U.S. Treasury continue to monitor cryptocurrencies?
Yes, the Treasury continues to closely monitor illegal activities and participates in building international financial policy.
5. Does the repealed regulation negatively impact financial security?
No, the Treasury has replaced it with other more appropriate oversight measures, focusing on genuinely high-risk organizations.
Source: https://tintucbitcoin.com/bo-tai-chinh-my-huy-bao-cao-moi-gioi/
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