IRS Formally Removes Anti-DeFi Broker Rule From Tax Code

The IRS announced Thursday it formally removed a controversial rule from the federal tax code that would have obligated decentralized finance platforms to collect and report the same financial information as traditional brokers. The so-called DeFi broker rule was adopted in the last weeks of former President Joe Biden’s administration, though it never went into effect. It was shortly thereafter repealed via a resolution supported by bipartisan majorities in both chambers of Congress.  In April, President Donald Trump signed the resolution, becoming the first U.S. president to turn a crypto-related bill into law.

Now, the Treasury Department and IRS have acted on that resolution, formally eliminating the rule from America’s tax code. According to a Treasury Department memo released Thursday, the bureaucratic action eliminating the DeFi broker rule was made on June 17, and is only now being publicly announced and implemented. When the proposed rule was first announced by the Biden administration’s Treasury Department in 2023, crypto industry leaders immediately voiced their vocal opposition to the measure, arguing it could destroy DeFi in the United States.