The US Treasury Department has formally rescinded a tax rule that classified decentralized finance (DeFi) platforms as 'brokers'. This decision eliminates the requirement for user data collection and cryptocurrency transaction reporting.
Revocation of Broker Rule in DeFi
The US Treasury has revoked a tax rule that classified decentralized finance (DeFi) exchanges as 'brokers'. This rule was introduced in December 2024 under the Biden administration, requiring platforms like Uniswap and PancakeSwap to collect user data and report transactions to the IRS. After taking effect in February 2025, the rule faced criticism for its technical impracticality. In March, Congress voted to repeal the regulation, and President Donald Trump signed the repeal into law on April 11. The Treasury now confirms the rule has no legal standing.
DeFi User Obligations
DeFi users remain responsible for reporting taxable gains. This change means the IRS will no longer receive automated transaction reports from platforms; it must rely on individual disclosures. This reduces compliance costs for decentralized protocol developers and avoids penalties for technical reporting failures.
Outlook for DeFi Developers
The repealed rule attempted to treat autonomous software as human entities. Its withdrawal acknowledges that smart contracts cannot perform traditional broker functions. Legal experts note that this preserves DeFi’s non-custodial nature. While regulatory challenges persist, the correction alleviates immediate pressure on blockchain innovators.
The revocation of the broker rule in DeFi signals a practical adjustment in the legislation, as lawmakers recognized the original rule’s incompatibility with decentralized technology. The Treasury will now explore alternative approaches to oversee crypto tax activities.
