Oct. 24, 2023
To whom it may concern, I am writing to express my concerns regarding the proposed regulations on Gross Proceeds and Basis Reporting for Digital Asset Transactions. While I understand the need for information reporting in the digital asset space, I find certain aspects of the proposed regulations to be confusing and potentially detrimental to small businesses and innovation. Firstly, requiring multiple participants in Decentralized Finance (DeFi) to comply with these reporting requirements may lead to a proliferation of inconsistent reports for the same transaction. This could create unnecessary complexity and administrative burdens, ultimately hindering the efficient operation of DeFi protocols. I recommend streamlining the reporting requirements to avoid this confusion. Secondly, the proposed regulations would impose additional costs on small businesses and start-up protocols. These entities, which may not typically be required to track personally identifiable information, would now be burdened with implementing such tracking. These additional expenses could pose a significant disadvantage to these projects and potentially stifle innovation within the digital asset industry. It is essential to consider the potential impact on small businesses and ensure that the reporting requirements do not disproportionately burden them. Lastly, I urge the consideration of allowing the market to determine the direction of innovation within the digital asset space. While regulation is necessary to ensure consumer protection and prevent fraudulent activities, excessive reporting requirements could impede the ability of businesses and projects to innovate and compete. By placing undue restrictions on the industry, we risk stifling technological advancements that could benefit both businesses and consumers. In conclusion, I respectfully request that you carefully consider the concerns raised regarding the proposed regulations on Gross Proceeds and Basis Reporting for Digital Asset Transactions. Finding a balance between effective reporting and fostering an environment of innovation is crucial for the continued growth and development of the digital asset industry. Thank you for your attention to this matter. Sincerely, Paul Hosking