Michele Korver, head of regulation at Andreessen Horowitz’s blockchain arm A16z Crypto, has voiced strong opposition to the US Treasury and the IRS’ new broker reporting rule.
In an official statement, it claims that it endangers the future of decentralized financial innovation (DeFi) in the United States.
Treasury’s “Midnight” reporting rule denounced
In a December 30 tweet, Korver described A16z’s support for a lawsuit filed by the DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council. This lawsuit aims to block regulations stemming from the Jobs and Infrastructure Investment Act, which seeks to expand the definition of brokers in a way that could include DeFi commercial front ends.
These platforms, which allow users to interact with decentralized protocols, do not directly facilitate transactions, a distinction highlighted in the lawsuit. The groups argue that the rule imposes undue burdens on DeFi entities, violates the Administrative Procedure Act (APA), and exceeds Treasury’s statutory authority.
Korver described the rulemaking process as a hasty “midnight” decision that undermines DeFi’s potential to provide accessible, efficient and consumer-centric financial services. He further stated the broader implications of the rule, warning that it could stifle innovation and push DeFi operations offshore.
A16z Crypto even reiterated that it would defend the sector through multiple avenues, including legal challenges and legislative defense with Congress and the incoming executive branch. Korver assured developers that industry attorneys are working to protect this technology, saying these efforts are critical to preserving the transformative potential of decentralized financial systems.
“We believe this final rule exceeds the Treasury’s statutory authority, violates the Administrative Procedure Act (APA), and is unconstitutional. DeFi builders should feel confident that industry attorneys are working hard to protect this technology. We will continue to fight on all fronts: in the courts and with the help of Congress and the new executive branch.”
The IRS draws backlash
Jake Chervinsky, a leading voice on crypto policy and head of policy at the Blockchain Association, also weighed in on recent developments, noting the crypto industry’s swift legal response to the broker rule, which was challenged within the 24 hours after its announcement. Chervinsky praised the evolution of the political infrastructure industry in the United States over the past two years and expressed optimism about the future of crypto and its ability to curb excessive regulation.
This stance has been echoed by other prominent figures in the crypto space. Unsiwap founder Hayden Adams criticized the timing and potential impact of the rule while suggesting it represents a deliberate attempt to hinder DeFi innovation. He expressed confidence in legal and legislative challenges to overturn the rule.
Meanwhile, Uniswap CLO Katherine Minarik also said that “there is no good reason for the new IRS rule to misclassify DeFi technology as brokers.” The executive added:
“It oversteps the clear limits set by Congress, will produce far more useless paperwork than the IRS can handle, contradicts itself across the technology, and imposes a burden that could cripple DeFi entirely. All so we can… perform massive surveillance unnecessary use of crypto transactions by everyday Americans. DeFi is the antidote to unbanking. The last thing we can afford is to try to drown it to death continuation”.
SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).
LIMITED OFFER for CryptoPotato readers on Bybit – Use this link to register and open a FREE $500 position with any currency!