The IRS had proposed a rule recently to formally define crypto brokers and direct them on how they and their customers can properly pay taxes

Coinbase, the biggest U.S. crypto exchange, is arguing that a recent proposal from the U.S. Internal Revenue Service (IRS) will imperil the industry and Americans’ privacy.

The IRS had proposed a rule recently to formally define crypto brokers and direct them on how they and their customers can properly pay taxes. But Coinbase stated in a comment letter to the IRS on Thursday that the proposed rule represents “an unprecedented, unchecked, and unlimited tracking on the daily lives of Americans.”

These rules would establish an incomprehensible and excessively burdensome set of new reporting requisites that will degrade and displace the same taxpayer services the IRS is looking to improve, as per the letter from Lawrence Zlatkin, the VP of tax for Coinbase Global Inc.

The Blockchain Association, a U.S. crypto advocacy group, had earlier contended that adopting these provisions could kill the industry in the U.S.

Hours before the Coinbase letter, the Internal Revenue Service had something of its own to say regarding crypto dragging down tax revenues with its latest “tax gap” figures that flags how much tax money the IRS should be receiving but isn’t. That figure underlined crypto as part of a growing problem, saying the projections cannot account for noncompliance in some areas including “issues involving digital assets and crypto currency.”

In August, the Treasury Department published around 300-page proposed rule, meant to finally abide by the 2021 Infrastructure Investment and Jobs Act. It sets out reporting obligations for centralized crypto exchanges, payment processors, some hosted wallet providers, some decentralized exchanges and people or entities that redeem crypto tokens.