The evolving landscape of cryptocurrency regulation has taken another significant turn with the recent decision by the US Department of the Treasury and the IRS, marking a new chapter in how digital assets will be treated under the law.
Revocation of the Controversial Crypto Reporting Requirement
On July 11, 2025, the Treasury and IRS officially nullified the crypto broker rule that previously imposed extensive reporting obligations on decentralized exchanges. This decision represents a crucial moment in the ongoing dialogue surrounding crypto regulations, reflecting a broader recognition of the unique characteristics of digital currencies.
Initially suggested in late 2021 under the Infrastructure Investment and Jobs Act, the rule aimed to bridge the “tax gap” by extending broker definitions to include decentralized finance (DeFi) platforms and other crypto intermediaries, which sparked significant concern among industry stakeholders.
The finalization of the rule at the close of the Biden administration expanded the definition of what constitutes a “broker,” obligating DeFi platforms to provide detailed transaction data, including personal information about users. This raised ethical questions and privacy concerns that many argued were excessively burdensome for decentralized entities.
Industry reactions have been powerful, labeling the requirements as “unfeasible” and critiquing the overly broad definitions that sought to encompass various types of market participants, many of whom did not possess the necessary data the IRS was demanding.
Despite the rule’s intended implementation by 2027, Congress swiftly responded, utilizing the Congressional Review Act to disapprove of the final rule. Notably, in April, this bill was signed into law, making it the first significant crypto legislation to gain presidential approval.
Following this revocation, the changes are now reflected in the Code of Federal Regulations, eliminating the previously aggressive stance towards crypto reporting and returning to a more lenient framework.
The Treasury and IRS stated that their actions are aligning with the achievements fostered through both Congress and the presidency. They confirmed that there would be no public comment period or any delay regarding this regulatory change.
A Regulatory Shift to Broaden Crypto Acceptance
This decision symbolizes a broader regulatory pivot under the new administration, which has expressed intentions to solidify the United States as a global leader in the cryptocurrency domain. Other government agencies are also moving to reverse previous rulings that limited the scope of crypto engagements.
In recent months, the Department of Labor rescinded guidance that had curtailed fiduciary opportunities to explore digital asset investments within retirement plans, a move viewed as encouraging for innovation and investor choice.
“We’re committed to diminishing bureaucratic overreach and empowering fiduciaries to make investment choices freely,” stated U.S. Secretary of Labor Lori Chavez-DeRemer.
Moreover, the Federal Reserve is revising its examination protocols to mitigate any reputational risks associated with banking for crypto firms, a step that facilitates greater access for these businesses to traditional financial services.
In tandem with these developments, enforcement-centric units from the SEC and DOJ are being reevaluated, shifting away from the contentious “regulation by enforcement” approach that many believed stifled potential growth within the industry.
As Congress actively pursues new frameworks designed to enhance the stability and security of the crypto market, bills focused on stablecoins and comprehensive market structures are gaining momentum, preparing for a critical discourse during the upcoming “Crypto Week.”
