Michele Korver, head of regulation at Andreessen Horowitz’s blockchain arm, A16z Crypto, has voiced strong opposition to the US Treasury and IRS’s newly issued broker reporting rule.
In an official statement, she claims that it jeopardizes the future of decentralized finance (DeFi) innovation in the United States.
Treasury’s “Midnight” Reporting Rule Lambasted
In a December 30 tweet, Korver outlined A16z’s support for a lawsuit filed by the DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council. This lawsuit aims to block regulations stemming from the Infrastructure Investment and Jobs Act, which seeks to expand the definition of brokers in a way that could include DeFi trading front-ends.
These platforms, which allow users to interact with decentralized protocols, do not directly facilitate transactions, a distinction highlighted in the lawsuit. The groups argue that the rule imposes undue burdens on DeFi entities, violates the Administrative Procedure Act (APA), and exceeds the Treasury’s statutory authority.
Korver described the rulemaking process as a rushed “midnight” decision that undermines DeFi’s potential to deliver accessible, efficient, and consumer-focused financial services. She further stated the broader implications of the rule, warning that it could stifle innovation and drive DeFi operations offshore.
A16z Crypto even went on to reiterate that it would defend the sector through multiple avenues, including legal challenges and legislative advocacy with Congress and the incoming executive branch. Korver reassured developers that industry attorneys are working to protect this technology, stating that these efforts are critical to preserving the transformative potential of decentralized financial systems.
“We believe that this final rule exceeds Treasury’s statutory authority, violates the Administrative Procedure Act (APA), and is unconstitutional. 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.”
IRS Attracts Backlash
Jake Chervinsky, a prominent voice in crypto policy and head of policy at Blockchain Association, also weighed down on the recent developments and pointed out the swift legal response by the crypto industry on the broker rule, which was challenged within 24 hours of its announcement. Chervinsky praised the industry’s evolution of policy infrastructure in the USA over the last couple of years and expressed optimism about the future of crypto and its ability to push back against regulatory overreach.
This stance has been echoed by other prominent figures in the crypto space. Unsiwap founder Hayden Adams, for one, criticized the rule’s timing and potential impact while suggesting that it represents a deliberate attempt to hinder DeFi innovation. He expressed confidence in legal and legislative challenges to overturn the rule.
Meanwhile, Uniswap CLO Katherine Minarik also said that “there is no good reason for the IRS’s new rule misclassifying DeFi technology as brokers.” The exec added,
“It races past the plain limits set by Congress, it will produce far more pointless paperwork than the IRS can handle, it contradicts itself throughout on the tech, and it imposes a burden that could cripple DeFi entirely. All so we can … conduct unnecessary mass surveillance on crypto transactions by everyday Americans. DeFi is the antidote to debanking. The last thing we can afford to do is try to choke it to death next.”
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