The US Treasury Department’s new tax proposal is an attack on DEXes and decentralization.

The 2021 law called the Infrastructure Investment and Jobs Act included a provision ordering the IRS to define who is defined as a “crypto broker,” and to create tax filing forms to report. Today the Treasury Department released its proposed rules. Crypto exchanges, certain hosted wallets, and payment processors will be defined as crypto brokers.

The controversial, and in my opinion, dangerous provision is including “some” decentralized exchanges as brokers. Most, if not all, DEXes do not collect the personal information necessary to comply with this regulation. It would probably be impossible given how they work. It would also destroy the anonymity and freedom that DEXes provide for investors. This will lead DEXes to leave the US and perhaps ban US users. All this does is deny Americans access to the future of personal finance.

The good news is that this proposal is not official yet. It is open to a comment period and public hearings. This is our chance to inform our congressmen of the problems in this regulation and to support lobbying efforts to change the definition of crypto brokers before it goes into effect.