IRS Repeals Controversial DeFi Reporting Rule

Regulatory Changes and Their Impacts

The U.S. Treasury and IRS announced the removal of the rule, which required certain DeFi protocols to report customer data. Key players include the IRS, the Treasury, and President Trump, who executed the repeal.

The repeal, enabled by House Joint Resolution 25, removes the broker classification for DeFi protocols, cited as impractical by crypto advocates. The rule’s removal could stimulate DeFi market growth by lessening fears of compliance burdens.

Centralized exchanges are still subject to new reporting requirements starting in 2026. They continue to prepare by enhancing know-your-customer data collection, highlighting regulatory distinctions within the financial sector.

While immediate financial shifts are unclear, historical trends indicate growing DeFi market confidence with decreased reporting demands. This may lead to increased activity and growth within decentralized protocols.

The IRS’s decision may lead to increased trading volumes and market activity as fears diminish over non-compliance with the repealed regulation. DeFi continues to evolve as clarity and favorable perspectives in regulatory landscapes emerge.

“Under the joint resolution and by operation of the CRA [Congressional Review Act], this final rule has no legal force or effect. The Department of the Treasury and the IRS hereby remove this final rule from the Code of Federal Regulations (CFR) and revert the relevant text of the CFR back to the text that was in effect immediately prior to the effective date of this final rule.” source