US President Donald Trump has signed a bill that cancels tax reporting requirements for decentralized finance (DeFi) platforms.
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Introduction
News about US President Donald Trump and the cryptocurrency market comes out almost every day. This time, US President Trump has signed a bill that cancels tax reporting requirements for decentralized finance (DeFi) platforms. This bill is the first crypto-related law signed in the US.
What is DeFi?
DeFi: It is called Decentralized Finance. In this system, financial elements are marketed globally without any intermediaries. It is a term frequently used in the cryptocurrency sector. Financial content such as asset trading, loans, insurance and lending.
Although it had previously attracted a lot of reaction in the US, a tax obligation was imposed on DeFi platforms. This tax, which was suddenly passed overnight as an omnibus bill, attracted a lot of reaction. The old regulation also required DeFi platforms to collect user information and report it to the IRS (U.S. Internal Revenue Service) just like traditional brokerage firms. The DeFi industry reacted strongly to this rule and argued that automated systems could not fulfill such an obligation.
Conclusion
White House crypto chief David Sacks described the additional regulation as “a regulation that the Biden administration issued in the middle of the night.” Sacks had previously stated that this rule would block the sector and render the IRS dysfunctional with millions of tax returns. In our opinion, this new bill has corrected a mistake. The cryptocurrency sector is a guide to decentralized financial institutions with its meaning and philosophy.
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