Reported by Aleks Gilbert

US-based websites and crypto wallets that provide easy access to the world of decentralised finance must perform background checks on customers and record their every transaction starting in 2027, the Treasury Department said Friday.

Crypto developers and attorneys have long warned the rules could pose an existential threat to decentralised finance, the blockchain-based financial software designed to cut out middlemen such as banks.

As of Friday, more than $179 billion in crypto had been deposited across the thousands of DeFi protocols tracked by DefiLlama.

The vast majority of that crypto has been deposited through user-friendly websites and applications, or front-end services, which enable people with little technical expertise to use DeFi protocols.

According to the new regulations, front-end services and wallets that let users swap crypto are brokers. As such, they will have to begin collecting vast amounts of customer data in 2027 in the name of preventing tax evasion and helping customers report their taxes to the Internal Revenue Service.

Read full report: https://www.dlnews.com/articles/regulation/us-treasury-takes-aim-at-defi-with-new-tax-regulations/