RICHARDSON, TEXAS AND WASHINGTON, D.C. – On December 27, 2024, the DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council filed a lawsuit in the U.S. District Court for the Northern District of Texas, challenging the Internal Revenue Service’s (“IRS”) and Treasury Department’s final “broker” midnight rulemaking on the basis that the rul (emaking exceeds the agencies’ statutory authority, violates the Administrative Procedure Act (“APA”), and is unconstitutional.
During the rule’s comment period, the public warned the IRS and Treasury that moving forward with the rule would cripple the digital asset industry. But the government ignored this feedback, leaving the digital asset sector with a rule that puts unlawful compliance burdens on software developers who build so-called “trading front-end services” and unhosted wallets. This midnight rule will stifle innovation and burden American entrepreneurs—if it stands.
“The new IRS broker rule imposes unrealistic expectations on the digital asset ecosystem,” said Texas Blockchain Council President Lee Bratcher. “The rule fails to recognize the decentralized nature of this technology, where many actors simply do not have access to the information the IRS is now demanding. This regulatory overreach risks driving critical development overseas, threatening US competitiveness in the digital economy.”
