Crypto platforms are relieved for now of the duty to report user transactions

The federal rule that would have required crypto platforms to report users’ transactions to the IRS has officially been scrapped.

President Trump signed a joint congressional resolution overturning the so-called DeFi Broker rule. Originally finalized by the Treasury Department in December 2024, the rule would have required platforms that facilitate digital asset transactions — including decentralized finance (DeFi) services — to report user activity on IRS Form 1099. It was scheduled to take effect in 2027.

The resolution nullifies a final Treasury regulation published last December titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.”

Supporters of the repeal say it will encourage innovation in the digital asset space. Critics argue it opens the door to tax underreporting that could cost the federal government nearly $4 billion in lost revenue.

The repeal was carried out under the Congressional Review Act, which allows Congress to nullify recently issued federal rules. Both the House and Senate passed identical resolutions earlier this year, clearing the way for the president’s action.

But the climate remains ripe for renewed attempts at regulation of the crypto sector because the Infrastructure Investment and Jobs Act expressly expanded the Internal Revenue Code’s definition of “broker” to include those who regularly provide “any service effectuating transfers of digital assets.”

What this means for the industry:

  • Crypto platforms are no longer required to track and report user transactions on Form 1099 under this rule.
  • The IRS’s expanded broker definition under Section 6045 remains in the tax code, but the repealed rule will not interpret or enforce it.
  • While the 2027 compliance deadline is now moot, new reporting obligations could resurface in a different form.

For more information on IRS regulations and processes, please contact Chantal C. Renta at crenta@foxrothschild.com or Jonathan M. Wasser at jwasser@foxrothschild.com.