US Treasury and IRS finalized regulations requiring crypto brokers to implement KYC. Set to start January 1, 2025, the rules apply to brokers holding digital assets for customers. DeFi interfaces must comply by 2027, amid criticisms of overreach.
Exemptions are set for compliance in 2025 and 2026. The regulations demand reporting on user activity and transactions for digital assets, including NFTs and stablecoins. Reporting guidelines from the IRS will come later, adding complexity to adherence.
Experts criticize the regulations as potentially illegal and beyond Treasury’s authority, predicting lawsuits. Should legal challenges arise, Congress might review the rules. Similar past regulations have faced repeal, signaling potential regulatory changes ahead.