A16z is suing IRS over new DeFi rules

Andreessen Horowitz’s blockchain arm, A16z Crypto , has criticized the US Internal Revenue Service (IRS) and the Treasury Department over their new DeFi rules .

In a Dec. 30 post on X, Michele Korver, the head of regulation at A16z, announced its support for the legal challenge led by the Blockchain Association, DeFi Education Fund, and Texas Blockchain Council.

These groups argue that the government’s new broker rules for digital asset service providers threaten the future of the US digital asset industry.

The DeFi Fund stated :

“In order to protect DeFi and the digital asset industry more broadly, we sued Treasury and IRS [to] challenge their doomed rulemaking, which would essentially serve as a DeFi ban.”

A16z defends DeFi

Korver explained that A16z Crypto’s support for the lawsuit is rooted in the belief that DeFi can create a more inclusive, efficient, and consumer-centric financial system. The firm views this legal challenge as critical to safeguarding DeFi’s future in the United States.

According to Korver, the US Treasury issued a “midnight” broker reporting rule that directly threatens and undermines the future of DeFi innovation in the United States.

Korver explained that the rule exceeds the Treasury’s statutory authority, violates the Administrative Procedure Act (APA), and is unconstitutional.

A16z Crypto reassured developers that it will continue advocating for DeFi on multiple fronts, including court actions and legislative engagement. She stated:

“DeFi builders should feel confident that industry attorneys are working hard to protect this technology. We will keep fighting on all fronts – in the courts, and with the help of Congress and the incoming executive branch.”

Meanwhile, notable figures in the crypto space have echoed A16z’s concerns. Uniswap founder Hayden Adams criticized the regulations, calling them a deliberate attempt to hinder DeFi in the final days of the current administration.

He added :

“Hopefully it’s thrown out using the congressional review act and if not it likely won’t stand up to legal challenges.”

Mentioned in this article