The status quo of decentralized finance, or DeFi, being an unstable wild west for US tax authorities is being challenged as proposed rules from the Department of the Treasury and the Internal Service Revenue (IRS) seek to track crypto exchanges. Coinbase’s Vice President of tax, Lawrence Zlatkin, weighed in by remarking the inherent difficulty in staying up to date with the peer-to-peer interactions taking place between DEX users. He further declared that they “shouldn’t be treated differently” than the standard tracking of gains and losses expected of investors. Pushback has been expressed by criticisms relating to privacy issues, with the DeFi Education Fund on Twitter advocating “the proposed ‘broker’ rulemaking… must be stopped” because of potential “tax policy and privacy concerns”.
