The United States Treasury Department and the Internal Revenue Service (IRS) received more than 44,000 comments after proposing the rule.
The recent Internal Revenue Service (IRS) reporting rule designating decentralized finance (DeFi) front-ends as brokerages has sent shockwaves through the crypto industry. Alex Thorn, the head of research at Galaxy Digital, outlined three potential options for DeFi if the IRS rule is not backtracked.
According to Thorn, DeFi services and applications can comply with the IRS reporting requirements and accept the designation as a brokerage, attempt to block users from the United States, or abandon smart contract upgrades and revenue generation. Thorn wrote:
"Said another way, extremely decentralized applications are not in a position to know and thus could not comply with broker reporting requirements," Thorn continued.
