The U.S. Treasury has rescinded the crypto broker reporting rule, significantly impacting DeFi participants by removing regulatory obligations.
Rule Withdrawal and Its Impact
The U.S. Treasury Department has officially withdrawn the cryptocurrency broker reporting rule, signed by President Trump on April 10, 2025. This action impacts participants in decentralized finance, removing regulatory obligations before they took effect in January 2027.
Effects on DeFi and Centralized Exchanges
The rescission provides lasting regulatory relief for DeFi protocols and liquidity providers. However, centralized exchanges must still comply with the revised 1099-DA reporting mandate from January 2025. This means that DeFi tokens like ETH, BTC, and governance tokens can grow without additional compliance burdens.
Market Response and Future Regulation
Immediate market reactions were absent due to the rule being repealed before its enforcement. However, this decision signals a favorable regulatory adaptation for decentralized applications. As regulatory pressures lift, DeFi protocols can operate without impending compliance threats, although centralized exchanges still face reporting requirements.
The rescission of the crypto broker rule by the U.S. Treasury provides significant regulatory relief for DeFi, while centralized exchanges remain under reporting obligations, creating new conditions for the market.
