Congress nullifies the DeFi broker reporting rule under the Congressional Review Act

What changed

Public Law 119-5 disapproved the Treasury and IRS final rule that would have required specified non-custodial DeFi participants to report digital-asset sales as brokers. The agencies subsequently removed the rule from the CFR and treated it as having no legal force or effect.

Who it affects

• Operators of DeFi trading front ends and other non-custodial interfaces addressed by the revoked rule
• Advisers assessing transaction-record and tax-reporting dependencies
• Digital-asset users whose activity would have been reported under the rule

What is still open

• Other existing tax reporting and taxpayer recordkeeping obligations
• Future legislation or materially different rulemaking
• Classification of custodial brokers and other intermediaries under rules not revoked by Public Law 119-5

What it means for an advisor

• Remove the revoked DeFi broker rule from forward-looking vendor and workflow assumptions
• Do not infer that clients or advisers have no digital-asset tax recordkeeping obligations
• Distinguish non-custodial DeFi interfaces from custodial brokers covered by other reporting rules

Previous interpretation

The December 2024 final rule was expected to bring specified DeFi trading front-end providers into section 6045 reporting beginning with later transaction years.