The U.S. Treasury Department and the Internal Revenue Service have formally repealed a controversial crypto tax reporting rule that would have required non-custodial service providers to report customer transactions, ending a prolonged regulatory dispute.
Rule Targeting DeFi and Non-Custodial Firms Is Nullified
Finalized in December 2024, the measure sought to expand broker reporting obligations under Section 6045 of the tax code to cover decentralized finance platforms and other non-custodial participants. It immediately faced criticism from crypto advocates and lawmakers, who argued that the rule stretched the meaning of “broker” too far and created serious privacy concerns.
Coin Center, led by executive director Jerry Brito, publicly opposed the rule soon after it was introduced. Other industry groups, including the Blockchain Association, the DeFi Education Fund, and the Texas Blockchain Council, also pushed back, saying the framework was unworkable for non-custodial operations.
Congress Reversed the Measure Through the CRA
Congress ultimately overturned the rule using the Congressional Review Act, and President Biden signed the disapproval resolution, H.J. Res. 25, on April 10, 2025. Under the CRA, a disapproved rule is treated as though it had never taken effect.
The Treasury and IRS then restored the tax code to its previous form, removing language aimed at digital asset intermediaries such as validators and hardware wallet manufacturers. Because the change resulted from congressional action rather than a fresh agency rulemaking process, no public comment period was required. The repeal became official upon publication in the Federal Register in July 2025.
Industry Sees a Privacy and Practicality Win
For many in the crypto sector, the repeal marks a clear policy victory. Opponents had long argued that imposing traditional broker-style reporting duties on non-custodial entities was both impractical and incompatible with how decentralized networks function. The episode also underscores a broader tension that continues to define digital asset policy in the United States: the ongoing struggle to balance regulatory oversight with technological innovation.