IRS Eliminates DeFi Broker Reporting Requirement in Tax Law

IRS Eliminates DeFi Broker Reporting Requirement in Tax Law

The Treasury and IRS struck the DeFi broker reporting rule from the tax code effective June 17, 2025, after it was repealed by Congress and signed by President Trump.

The U.S. Treasury and IRS officially removed the controversial crypto broker rule (formally known as TD 10021 under Section 6045) from the Code of Federal Regulations. The rule, finalized in December 2024, would have required decentralized finance platforms and non-custodial service providers to collect and file customer transaction information.

Congressional Repeal Using Review Act

Congress used the Congressional Review Act in March 2025 to pass a joint resolution nullifying the rule, which President Trump signed into law in April. Industry concerns centered on DeFi platforms operating via smart contracts being unable to comply with traditional broker reporting requirements.

When first proposed by the Biden administration’s Treasury in late 2023, the rule faced immediate opposition from crypto advocates arguing it threatened DeFi’s automated, non-custodial model by mandating the collection of personally identifying information (PII).

“The outdated broker definition will now exclude entities engaged solely in validating distributed-ledger transactions or providing wallet software,” the Treasury said in its June 17 memo.

Industry Response and Regulatory Impact

Under the repeal, the IRS “treats the rule as though it had never taken effect,” eliminating obligations for DeFi protocols, wallet providers and other non-bank entities to file Form 1099-DA or similar returns.

Industry groups hailed the removal as a win for innovation, noting that compliance costs and privacy concerns would have been prohibitive for decentralized platforms.

Senator Ted Cruz, who led the repeal effort, remarked that the rollback “prevents massive overreach into decentralized finance that Congress never intended.”

The repealed rule originated from the Infrastructure Investment and Jobs Act of 2021, which expanded the term “broker” but left its DeFi application ambiguous until TD 10021’s publication on December 30, 2024. The IRS’s action restores the tax code to its state before the crypto broker rule.

Articles by this author

Blockchain Trilemma Explained

Blockchain Trilemma Explained

Scalability, decentralization, security: the blockchain trilemma forces every crypto project to choose. We break down why solving it is still the industry’s hardest game.

A Step-by-Step Guide to Mastering Crypto Day Trades

A Step-by-Step Guide to Mastering Crypto Day Trades

Day trading crypto means fast decisions, sharp focus, and high risk. This guide breaks down how to day trade bitcoin and altcoins with structure, strategy, and control.

How to Read Candlesticks in Crypto

How to Read Candlesticks in Crypto