Three prominent blockchain advocacy organizations filed a lawsuit challenging the Internal Revenue Service’s new broker reporting requirements.

The organizations argue that the rules could severely impact the U.S. digital asset sector, particularly decentralized finance (DeFi).

The Blockchain Association, DeFi Education Fund, and Texas Blockchain Council jointly filed the legal challenge in the U.S. District Court for the Northern District of Texas.

They contended that the IRS and Treasury Department’s final “broker” rulemaking exceeds their authority.

The lawsuit specifically targets the rule’s expansion of the “broker” definition to include providers of DeFi trading front-end services, despite these entities not directly facilitating transactions.

The Blockchain Association CEO Kristin Smith called the broker rule “unconstitutional,” alleging that the IRS is violating the Administrative Procedure Act.

According to the Blockchain Association’s Head of Legal, Marisa Coppel, this overreach “would push this entire, burgeoning technology offshore” while infringing on the privacy rights of individuals using decentralized technology.

DeFi Education Fund CEO Miller Whitehouse-Levine expressed strong disappointment in the timing and scope of the regulation. Miller called it “midnight rulemaking” that threatens financial innovation.

The organization emphasized DeFi’s potential to make financial services more accessible, efficient, and consumer-focused.

Texas Blockchain Council President Lee Bratcher highlighted the practical impossibility of compliance. He stated that many actors in the decentralized ecosystem simply cannot access the information now required by the IRS.

“This regulatory overreach risks driving critical development overseas, threatening US competitiveness in the digital economy,” Bratcher stated.

The legal challenge comes after numerous stakeholders warned during the public comment period about the potential negative impacts on the digital asset industry. Crypto.news had earlier reported that DeFi proponents had promised aggressive action against the IRS policies.

The web3 infrastructure provider MoonPay is reportedly mulling a $150 million acquisition of the crypto payments provider Helio.

Fox Business reporter Eleanor Terrett reports that MoonPay is in talks over the deal, which would represent the crypto firm’s largest acquisition.

Helio aims to make “accepting crypto payments effortless for merchants and apps worldwide.” The payment provider supports major chains including Solana (SOL), Ethereum (ETH), Bitcoin (BTC), and Base.

“We power crypto checkouts for +6,000 merchants & apps, and millions of unique active wallets.

You can self-serve to set up a Helio merchant account in minutes & get paid instantly for E-commerce, pre-sales, subscriptions & digital products in USDC, SOL, ETH, BTC & 100s of digital assets.”

In June, the crypto payments firm launched a Solana Pay plugin for the e-commerce giant Shopify, enabling buyers to use SOL and hundreds of other crypto assets with automatic swaps to stablecoins.

MoonPay bills itself as the “world’s leading” web3 infrastructure firm.

“We provide end-to-end solutions for payments, enterprise-scale smart contract development, and digital asset management. Many of the world’s most iconic brands rely on MoonPay to power their Web3 strategies and ideas.”

The crypto firm has more than 20 million verified accounts and is supported in 180 countries.

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Blockchain security auditor Hacken is rolling out a new tool to automate security and compliance for web3 businesses as MiCA and DORA rules loom.

Hacken, an international blockchain auditor with Ukrainian roots, is rolling out a new solution that allows web3 businesses in an automated manner to comply with standards like Europe’s MiCA and DORA.

In a press release shared with crypto.news, Hacken co-founder and chief executive Dyma Budorin said the firm developed the so-called “Extractor” to address the “critical need for proactive monitoring and compliance in the crypto space.” According to the Tallinn-headquartered firm, Extractor brings compliance monitoring framework for web3 projects, making it easier to meet regulatory standards like MiCA, DORA, and ADGM.

Unlike other solutions available on the market, Hacken’s solution is said to be combining AML/CFT monitoring, transaction tracking, total value locked analysis, and circulating supply detection into a structured compliance approach. It also integrates real-time threat detection, automated safeguards, and post-incident reporting to ensure continuous protection and operational resilience, the press release reads.

Valentyna Kondratenko, Hacken’s legal counsel noted that beginning Jan. 17, 2025, DORA’s requirements “will become enforceable,” adding further that non-compliance “can result in severe penalties, such as fines of up to 2% of the total annual worldwide turnover or 1% of the average daily global turnover.”

It’s understood that the solution is compatible with multiple blockchain networks, including Ethereum and BNB Chain (formerly Binance Smart Chain), broadening its potential use.

MiCA regulations have created challenges for crypto companies aiming to expand in the European market. For example, crypto exchange Coinbase had to discontinue USDC rewards for EU clients due to MiCA, and later even delisted Tether (USDT) from its European platform.