Treasury and IRS finish broker rules for DeFi, require KYC from protocols
The US Department of the Treasury and the IRS have finalized broker rules for digital asset service providers, mandating DeFi protocols to implement Know-Your-Customer (KYC) procedures. Critics argue these provisions exceed the Treasury's regulatory authority. Brokers handling digital assets must report sales, exchanges, and user activity, with compliance deadlines set for January 1, 2025, for general brokers and January 1, 2027, for DeFi brokers. Reporting obligations will cover all digital assets, including NFTs and stablecoins. Certain transactions, like staking and lending, are excluded from immediate reporting requirements. Relief from reporting penalties is available for good faith compliance in 2025 and limited relief in 2026. Community backlash includes potential lawsuits claiming the rules violate the Administrative Procedure Act and calls for Congressional review.
