Uniswap’s Chief Legal Officer (CLO), Katherine Minarik, has publicly called for a challenge to the Internal Revenue Service’s (IRS) recent decision classifying decentralized exchanges (DEXs) as brokers under US tax law.
In a strongly worded statement, Minarik argued that the interpretation is fundamentally flawed and could stifle innovation in the cryptocurrency industry by placing impractical compliance burdens on decentralized platforms.
IRS ruling sparks controversy
Earlier this year, the IRS issued guidelines requiring DEXs to report user transactions, citing broader efforts to curb tax evasion. The ruling brings DEXs in line with traditional financial brokers and requires them to comply with strict reporting requirements. Critics, including Minarik, have pointed out that such compliance is not technically feasible due to the decentralized nature of these platforms.
Source: X
“This ruling reflects a fundamental misunderstanding of how decentralized exchanges work,” Minarik said during a recent industry conference. “Unlike centralized platforms, DEXs lack the ability to collect user information, which is essential for broker-level reporting.”
The broader impact on the industry
The IRS decision has caused uproar in all parts of the crypto community. Industry leaders say such categorization contradicts the entire “decentralized” ethos of blockchain. Forcing DEXs to conform to broker regulations will only further discourage developers and users from making active contributions to a decentralized system, pushing innovation to countries with friendlier regulatory rights.
The verdict according to Blockchain…
