Uniswap CLO Criticizes IRS Ruling on DEX Reporting Standards
The U.S. Internal Revenue Service (IRS) has unveiled new regulations requiring decentralized exchanges (DEXs) to meet the same reporting standards as traditional brokers. Announced on December 27, the rules mandate reporting gross proceeds from digital asset transactions, including cryptocurrencies, stablecoins, and NFTs.
The regulations, set to take effect in 2027, have sparked criticism for misclassifying DeFi platforms as brokers, despite their decentralized nature.
Robin Singh, CEO of Koinly, highlighted the impracticality of the new requirements, citing operational and technical challenges for decentralized platforms that lack traditional reporting infrastructures. Critics argue the rule’s global reach, covering U.S. and international users, imposes undue burdens on the DeFi ecosystem.
Uniswap Leaders Call for Legal Action
Uniswap’s Chief Legal Officer (CLO), Katherine Minarik, has called for immediate challenges to the IRS’s ruling. “No shortage of ways to challenge this, and it absolutely should be challenged,” she posted on X (formerly Twitter). Minarik questioned the IRS’s rationale, noting that DeFi platforms facilitate parts of transactions but do not function as brokers in the traditional sense.
CEO Hayden Adams echoed these concerns, expressing hope that the rule could be overturned through legal challenges or the Congressional Review Act (CRA). Crypto tax experts like Bill Hughes of Consensys labeled the ruling as “all cost, no benefit,” warning of its potential to stifle innovation in the U.S.
Congressional Pushback and Industry Advocacy
The crypto industry has rallied against the IRS’s move, with advocacy groups like the Blockchain Association preparing to fight the regulation. Kristin Smith, the group’s CEO, emphasized the urgent need to address the broader implications of the rule, which many see as a final effort by the outgoing administration to constrain the U.S. crypto sector.
Alexander Grieve of Paradigm and Miles Jennings of a16z Crypto have called on Congress to leverage the CRA to repeal the regulations. Jennings criticized the IRS for redefining “effectuate transactions” to target DeFi activity, a move he argues oversteps its mandate.
With the new pro-crypto Congress and administration expected in 2025, industry leaders remain optimistic about overturning the regulations. As the debate intensifies, the ruling underscores the ongoing clash between decentralized innovation and regulatory frameworks.
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