U.S. Crypto Community Voice Concerns about Crypto Tax Laws

Today, the IRS is listening to the crypto community's concerns about proposed changes to how cryptocurrencies are taxed. The main worries are about protecting user privacy, deciding which crypto businesses must share transaction details, the role of stablecoins, and whether these new rules suggest cryptocurrencies are like stocks.

The IRS is taking the crypto world's final feedback on a new plan that some say could threaten privacy and disrupt decentralized crypto projects. After collecting over 120,000 comments, they will hold an audio-only public hearing with leading crypto supporters to discuss these issues.

The industry is upset about how the new tax rules define a "broker" who must comply. Organizations like the DeFi Education Fund believe the rules could unfairly target every blockchain participant. The IRS aims to include various crypto platforms and services under this definition, which could be challenging for some to provide the needed information.

The Americans for Tax Reform group and others are also worried about the government's reach into private transactions, with Coinbase's tax VP arguing it could lead to extensive tracking of Americans' daily activities. However, despite the backlash, there is an upside: clear tax rules could remove the uncertainty that currently hinders crypto investment interest.

If the IRS finalizes these rules before the SEC, it would mark a big step in U.S. crypto regulation by defining digital assets' place in finance. But due to the massive amount of feedback, it might take longer for the IRS to finalize these regulations. Other concerns include the treatment of stablecoins and whether these rules relate to securities law. The crypto community is asking the Treasury to clarify that these rules won't categorize digital assets a