US Treasury Scraps Controversial Crypto Broker Reporting Rules

The US Department of the Treasury and the IRS have formally revoked a contentious Biden-era rule that would have forced decentralized crypto exchanges to comply with stringent broker reporting requirements. The regulation, initially proposed in 2021 under the Infrastructure Investment and Jobs Act, sought to narrow the "tax gap" by redefining "brokers" to include crypto platforms—mandating they disclose user transaction details, including names and addresses.

Industry backlash was immediate and sustained. Market participants decried the rule as "unworkable," arguing the expanded broker definition was overly broad and logistically impractical for decentralized protocols. The policy, slated for full implementation in 2027, was ultimately dismantled through a Congressional Review Act resolution in March.

The reversal signals a regulatory reprieve for DeFi platforms grappling with compliance ambiguities. While the Treasury's initial push reflected growing scrutiny of crypto tax evasion, its retreat underscores the challenges of applying traditional financial frameworks to decentralized ecosystems.