The IRS has officially removed a controversial DeFi-focused rule from the U.S. tax code effective July 10, 2025. This decision will alleviate the tax burden for DeFi projects.
Removal of IRS Reporting Rule
The IRS has repealed a controversial rule related to DeFi that originated from the 2021 Infrastructure Investment and Jobs Act. This repeal was enabled by bipartisan support in the U.S. Congress and a signed resolution by President Trump. DeFi projects are no longer required to provide customer transaction reports, significantly reducing administrative costs.
Impact on DeFi Projects
The elimination of the rule frees DeFi protocols from significant tax obligations. This change may rekindle institutional interest and improve conditions for innovation in this area. Centralized exchanges remain under existing reporting requirements.
New Opportunities for the Market
The removal of regulatory burdens is expected to create positive sentiment in the DeFi market, particularly in areas such as Ethereum and associated DeFi tokens. Experts predict an increase in activity within decentralized finance, which could lead to substantial market growth.
Overall, the IRS's repeal of the reporting rule has the potential for positive effects on the DeFi sector, reducing regulatory burdens and creating room for growth and innovation.
