The US Department of the Treasury and IRS have finalized broker rules for digital asset service providers, requiring brokers, including DeFi protocols, to perform Know-Your-Customer (KYC) procedures and report sales, exchanges, and user activity. The rules, effective from Jan. 1, 2025, with DeFi-specific obligations starting in 2027, extend to all digital assets, including NFTs and stablecoins, despite industry pushback.
Critics argue that the rules exceed Treasury's authority and predict legal challenges, with possible Congressional review. Limited relief is offered during a transition period, and some transactions like staking, lending, and wrapping are temporarily excluded. Future IRS guidance will address additional complexities in DeFi.
