DeFi stays outside the rules as regulators tighten elsewhere: Finance Redefined

Europe narrows crypto tax gaps, US lawmakers revisit market structure, and institutions push DeFi into compliance territory.

The European Union’s new crypto tax reporting regime under DAC8 is intentionally focused on enforceable targets, leaving decentralized finance (DeFi) outside its scope for now.

Colby Mangels, a former adviser to the Organisation for Economic Co-operation and Development (OECD) and now Taxbit’s global head of government solutions, said the rules prioritize identifiable intermediaries such as custodians and exchanges, which will be required to collect and report standardized user activity data under the OECD’s Crypto Asset Reporting Framework (CARF).

However, the DeFi carve-out may not last. Mangels said tax authorities are increasingly drawing on Anti-Money Laundering (AML) frameworks to define accountability in crypto markets, and regulators are closely watching whether DeFi platforms can be classified as virtual asset service providers.

Read more