US Treasury and IRS Abandon Controversial Crypto Regulation
In a significant move, the United States Department of the Treasury, along with the Internal Revenue Service (IRS), has withdrawn a contentious rule that would have required decentralized crypto exchanges to adhere to broker reporting requirements. This decision marks a notable shift in the regulatory landscape for digital assets.
US Treasury and IRS Revoke Crypto Broker Reporting Mandate
On a pivotal Thursday, the Treasury Department and the IRS made an official announcement stating the revocation of the crypto broker rules. These rules initially called for decentralized platforms to report extensive customer data to tax authorities. The proposal, introduced through the Infrastructure Investment and Jobs Act in November 2021, aimed to bridge the “tax gap” by redefining “brokers” to encompass crypto exchanges and intermediaries.
Advertisement Banner
However, the regulation faced substantial opposition from industry stakeholders. Many criticized the expanded definition of a “broker” as overly broad and impractical, arguing that it imposed unrealistic expectations on decentralized finance (DeFi) platforms, which often lack the necessary data to comply with such mandates.
Congressional Intervention and Regulatory Changes
Earlier this year, Congress intervened by passing a joint resolution under the Congressional Review Act (CRA) to disapprove of the final rule. This resolution, titled “Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales,” received presidential assent in April, marking a historic moment as the first crypto-related bill signed into law by a U.S. president.
Effective from July 11, 2025, the crypto broker rule will no longer have any legal standing. The Treasury and the IRS have taken steps to remove it from the Code of Federal Regulations (CFR), reverting the relevant text to its pre-rule state. The agencies emphasized that this change reflects the progress made through legislative and executive actions, and there will be no solicitation for public comments on this matter.
Regulatory Shifts Under New Leadership
This development is part of a broader regulatory shift under the current administration, which aims to position the United States as a leader in the crypto industry. In May, the Department of Labor rescinded its 2022 guidance, which had previously discouraged the inclusion of digital assets in 401(k) retirement plans. This move aligns with the administration’s commitment to fostering a more favorable environment for digital asset investments.
Furthermore, the Federal Reserve has updated its guidelines, removing “reputational risk” from bank examination criteria, thereby easing access for crypto firms to traditional banking services. Simultaneously, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have dismantled their units focused on crypto enforcement and are moving away from a “regulation by enforcement” approach.
Congressional Efforts and Future Prospects
Congress is also actively working on advancing a comprehensive crypto framework. Key legislative efforts include the stablecoin bill, the GENIUS Act, and the CLARITY Act, all of which are expected to be focal points during the upcoming “Crypto Week.” These initiatives aim to establish a clear regulatory structure that promotes innovation while ensuring consumer protection in the rapidly evolving digital asset space.
Editorial Standards and Assurance
The Editorial Process at our publication is dedicated to delivering meticulously researched, accurate, and unbiased content. Our rigorous sourcing standards and thorough review process by experienced technology experts and editors ensure that our readers receive content of the highest integrity, relevance, and value.
