Crypto Uproar: Uniswap’s Legal Chief Sparks Mystery Battle Against New IRS Rule!

Uniswap’s Chief Legal Officer, Katherine Minarik, has publicly stated that a new rule from the U.S. Internal Revenue Service (IRS) regarding decentralized exchanges and their reporting obligations should “absolutely” be contested. This sentiment is shared among several crypto executives and legal professionals who believe the regulation, which equates the reporting duties of decentralized exchanges with those of traditional brokers, is not sustainable.

The regulation was announced on December 27th and mandates that brokers report gross proceeds from digital asset transactions starting from 2027. This includes all digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and stablecoins. Uniswap CEO, Hayden Adams, expressed hope that the Congressional Review Act will overturn the rule and remained optimistic about potential legal challenges.

Robin Singh, CEO of the crypto tax platform Koinly, highlighted the substantial costs businesses might incur to establish compliant reporting systems. Singh pointed out that the decentralized nature of these platforms inherently lacks the traditional structures needed for such compliance, posing a considerable challenge.

Consensys lawyer Bill Hughes criticized the rule, branding it as “all cost, no benefit” in terms of revenue. He emphasized that it targets front-end platforms to monitor and report both U.S. and international transactions. Hughes suggested that the timing of the ruling’s release — during a holiday stretch — was intentional, as it now faces potential Congressional repudiation.

Overall, the crypto industry appears unified in its disapproval of the IRS ruling, reflecting a broader push for the regulation to be limited by clear principles that appropriately accommodate the nuances of decentralized finance technology.