The United States Congress voted recently to repeal the controversial rule of the Decentralized Finance Corridor of the Internal Revenue Service (IRS) (IRS), a great victory for Crypto. And on Thursday, President Trump killed the measure forever.
But let’s not fool ourselves, there is more pain to come.
In December 2024, the IRS proposed a broad rule that requires that the platforms Defi follow the standard cryptographic tax rules, including the extensive user KYC and other disseminations. The cryptographic industry immediately delayed, with numerous blockchain groups demanding the IRS almost as soon as the rule was announced.
Defi platforms are not designed to collect this type of information in the first place, and beyond that, the proposed rule contradicts the central objective of Defi to protect privacy while maintaining transparent transactions.
Fortunately, it is likely that this rule be completely discarded under the administration of Donald Trump after the vote of the United States Senate against the ruling on March 26. This follows the vote of 292-132 of the United States Representatives Chamber on March 11 and the vote of 70-27 previous of the Senate on March 4, both in favor of repealing the broker government of the Senate Broker.
If the rule had remained, the Cryptography and Innovation industry of the United States would have damaged beyond Just Defi. As an operator of Crypto Tax Platform Koinly, I know it would also have made compliance with more expensive and complicated for us.
But it is far from finishing.
This repeal was easy because the rule was so exaggerated that even most government officials saw it as unfeasible. But what happens when the IRS returns with a more subtle and carefully elaborate rule that is again addressed to Defi? Vorating this version does not prevent the agency from trying again.
I would not be surprised if the IRS now performs a hiring spree so that Defi experts help with this, especially after bringing several cryptography specialists to the agency in February 2024.
IRS is acting as if there was still a fortune in cryptographic taxes without compilation
The IRS clearly believes that Crypto’s tax revenues is being lost and is pressing to expand its scope as much as possible. Defi may be focused on privacy, but still implies money, so it will not be ignored soon.
The Irs will not take this rule lightly either. It would not be exaggerated to assume that the agency will increase its audits even more about US cryptography users. UU. To ensure that its presentations are precise.
So what should the cryptographic industry of the United States do? It cannot afford to be reactive. Instead of waiting for the IRS to drop another hard cryptography tax decision, it must press even harder for regulatory clarity on Defi to prevent poorly informed and exceeded rules from emerging again.
The best time to promote the fiscal rules of the fairest IRS is now
Although cryptocurrency defense groups are already doing a great job in this, the industry must be even more persuasive, especially when promoting the rules that distinguish true corridors from intelligent self -evaluation contracts, they ensure just tax treatment for Defi participants and provide a clear guide of reports without suffocating innovation.
With Trump in the position and a more friendly atmosphere for Crypto in Washington, there is the possibility of obtaining regulations just before the pendulum returns to the aggressive application.
That means there is a four -year window to put this in shape.
Although the cryptographic industry is proactive and interacting with Trump, it must ensure that these rules are completely approved, clarified and established. Otherwise, I could face an even harder regulatory regime under a less friendly future administration with decentralized technologies.
The IRS Corridor Rule should serve as a warning: until there is a viable framework in place, regulators will continue to try to impose hard rules on a technology that they barely understand.
And next time, the cryptographic industry may not be so lucky to obtain enough votes for a repeal.
