The US IRS Targets DeFi Platforms with New Reporting Rules

The US IRS Targets DeFi Platforms with New Reporting Rules

The US IRS finalized regulations requiring DeFi front-end platforms to report user data and gross proceeds from crypto sales. These rules, effective from 2027, classify such platforms as brokers under existing tax laws, impacting an estimated 650 to 875 protocols and 2.6 million taxpayers.

Industry leaders, including the Blockchain Association, criticized this as regulatory overreach, warning it could drive innovation offshore. Advocacy groups have already filed lawsuits, arguing that the rule misunderstands DeFi's structure, which operates without intermediaries like traditional brokers.

Critics also claim the IRS overstepped its authority, as Congress never explicitly intended these rules to apply to DeFi projects. The Congressional Review Act (CRA) could be employed by lawmakers to overturn the regulations under the new pro-crypto administration in 2025.

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Jupiter to Distribute 700M Tokens in January Airdrop

Jupiter, the largest decentralized exchange aggregator on Solana, announced a January airdrop of 700 million JUP tokens valued at $580 million. This event, called “Jupuary,” will reward users, stakers, and key contributors based on a snapshot of activity taken earlier.

The eligibility criteria are under community review but may include trading volume requirements, with 2.3 million wallets reportedly qualifying. Users with $800 annual volume could receive 50 tokens, while those trading $29,000 might get 250 tokens.

Last year, Jupiter distributed 1 billion tokens to users meeting a $1,000 swap volume threshold. The current circulating supply of JUP stands at 1.35 billion, with plans to reduce the total supply from 10 billion to 7 billion tokens through community-approved burns.

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Volatility Shares Files for Solana Futures ETF

Volatility Shares has filed for three ETFs geared to offer exposure to Solana futures contracts, including 1x, 2x, and -1x leverage options. Notably, no Solana futures products currently exist on CFTC-regulated exchanges. The filing includes a provision to invest only in futures contracts traded on CFTC-registered platforms, signaling confidence that Solana futures could soon launch.

Bloomberg analyst Eric Balchunas called the move a positive indicator for broader spot ETF approvals in the digital asset space. Volatility Shares previously pioneered leveraged Bitcoin and Ether futures ETFs, inspiring similar products from competitors. These ETFs are part of a wave of funds aimed at capturing institutional interest in digital assets.

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Do Kwon’s US Extradition Approved by Montenegro’s Minister

Montenegro’s Justice Minister, Bojan Božović, approved Terraform Labs founder Do Kwon’s extradition to the US to face criminal charges. Both the US and South Korea had sought Kwon’s custody over allegations related to the 2022 collapse of the Terra/Luna algorithmic stablecoin. Kwon, arrested in Montenegro in 2023 for passport forgery, has contested extradition for over a year.

The Supreme Court’s recent decision cleared the way for the Justice Ministry to prioritize the US request based on the gravity of the charges and other criteria. Terra's collapse caused global market instability and regulatory scrutiny, which is still evident in some nations, and the recent extradition decision adds to the ongoing fallout.

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Data of the Day

Australia’s Bitcoin ATM network has grown consistently for 29 months, reaching 1,359 machines as of December 2024. This figure represents 3.5% of the global Bitcoin ATM market and positions Australia as the third-largest network worldwide, behind the US and Canada. Europe, by comparison, has 1,660 ATMs, making Australia’s total nearly competitive with the continent’s.

Globally, there are 38,753 Bitcoin ATMs, with the US dominating at 31,516 machines (81.3% of the market). Despite their growth, Bitcoin ATMs are increasingly used in scams, with US losses exceeding $110 million in 2023. Lawmakers in the US are urging operators to implement stronger anti-fraud measures to address this issue.

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More Breaking News

• Galaxy Research predicts the US government will explore Bitcoin reserve policies in 2025 but won’t purchase additional Bitcoin for now.
• A father pledged $1 million to cancer research after a meme coin created in his daughter's name reached an $80 million market cap.
• Meme coins lost $40 billion in market cap in December, dropping from $137 billion to $92 billion amidst volatile trading.
• Binance's Anti-Scam Initiative prevented over $129 million in losses in 2024, leveraging AI, machine learning, and proactive user alerts.
• Ethereum NFT trading volume hit $186 million last week, thanks to Pudgy Penguins’ PENGU token launch, resulting in a 67% increase.

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