The US Department of the Treasury and the IRS have released the final version of their broker rules for digital asset service providers, requiring DeFi protocols to conduct KYC procedures. Industry experts criticize the provision as unlawful and outside of the Treasury's regulatory reach. The regulations require brokers to report sales and exchanges and track and report user activity. DeFi front-ends will also need to perform KYC processes. The new rules will be applied to DeFi brokers from Jan 1, 2027. The IRS plans to issue future guidance to address more complex aspects. Experts believe the rule may face legal challenges and be reviewed by Congress.



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