The U.S. Treasury Department has officially withdrawn a proposed regulation that would have required decentralised finance (DeFi) platforms to report user transactions to the Internal Revenue Service (IRS), marking a major win for crypto advocates.
Known as TD 10021, the rule sought to classify DeFi protocols and similar crypto service providers as brokers, placing them under the same regulatory obligations as traditional financial intermediaries. However, the rule was overturned through a resolution passed by both chambers of Congress and signed into law by President Donald Trump in April 2025.
The move came amid growing criticism from the crypto community, who argued that enforcing such reporting requirements on DeFi platforms—many of which are operated by autonomous smart contracts—was impractical and would stifle innovation in the blockchain sector.
Following the repeal, the IRS confirmed that the rule now holds “no legal force or effect,” and it has been removed from the tax code as if it had never been enacted. The department has reverted to pre-existing guidance, which excludes blockchain validators and wallet software developers from broker classification.
For now, this means DeFi protocols and wallet providers are not obligated to collect or submit customer transaction data to the IRS. However, with crypto regulation evolving rapidly, new policies could emerge as lawmakers continue to assess the sector’s long-term impact on financial oversight and taxation.
