Andreessen Horowitz’s blockchain arm, A16z Crypto, has come out against the recent regulations proposed by the US Internal Revenue Service (IRS) and the Treasury Department regarding decentralized finance (DeFi). In a post on X on December 30, Michele Korver, the head of regulation at A16z, announced the firm’s support for a legal challenge led by the Blockchain Association, DeFi Education Fund, and Texas Blockchain Council.
These organizations have raised concerns that the new broker rules for digital asset service providers could potentially stifle innovation and hinder the growth of the US digital asset industry. The DeFi Fund issued a statement saying, “In order to protect DeFi and the digital asset industry more broadly, we sued Treasury and IRS [to] challenge their doomed rulemaking, which would essentially serve as a DeFi ban.”
A16z Stands Up for DeFi
Korver emphasized that A16z Crypto’s support for the legal challenge is based on their belief that DeFi has the potential to revolutionize the financial system by making it more inclusive, efficient, and consumer-centric. The firm sees this lawsuit as a critical step in safeguarding the future of DeFi in the United States.
Korver pointed out that the Treasury’s new broker reporting rule poses a direct threat to the future of DeFi innovation in the country. She argued that the rule goes beyond the Treasury’s authority, violates the Administrative Procedure Act (APA), and raises constitutional concerns.
A16z Crypto assured developers that they will continue to advocate for DeFi through legal action and engagement with policymakers. Korver stated, “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.”
Notable figures in the cryptocurrency space, such as Uniswap founder Hayden Adams, have also voiced their opposition to the regulations. Adams criticized the rules as a deliberate attempt to hinder DeFi in the final days of the current administration. He expressed hope that the regulations would be overturned through congressional review or legal challenges.