Legal Battle in Texas Threatens Future of Decentralized Finance (DeFi) in the US

A legal battle in Texas is underway as the DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council challenge the IRS and Treasury's "broker" rule, which they argue exceeds statutory authority, violates the Administrative Procedure Act, and is unconstitutional. The rule's broad definition of a "broker" includes DeFi trading front-ends, which could potentially push the entire industry offshore and stifle innovation. This case highlights the tension between traditional financial systems' regulatory frameworks and disruptive technologies like DeFi, and the outcome could shape the future of regulation and innovation in the US. The success of tech hubs like Austin could be at risk if the regulatory uncertainty created by the IRS's rule forces talent and investment to flow elsewhere.