In a massive development for the crypto industry and DeFi in particular, the US Treasury has officially dropped the crypto broker reporting rule. This comes just months after Congress revoked the IRS tax rule.
DeFi Scores Big Win As Treasury Drops Crypto Broker Reporting Rule
According to a Bloomberg report, the Treasury Department has scrapped the federal law after the US Congress voted to revoke it earlier in the year. The law stipulated how decentralized platforms, including exchanges, would report customer transaction information to the IRS for tax purposes.
The US Treasury introduced the crypto broker reporting rule in December 2024. However, the rule would have taken effect from 2027. This marks a win for DeFi, considering that stakeholders had argued the crypto broker reporting rule would be an obstacle to innovation.
These DeFi platforms are ‘decentralized’ and their reporting of user transactions would have negated the idea of decentralization. Meanwhile, this also underscores the Trump administration’s commitment to promoting the crypto industry in the US.
However, despite the move to drop the crypto broker reporting rule, centralized exchanges still face tax obligations in relation to reporting user transactions. The US Supreme Court ruling against Coinbase and its users made this clear.
The justices refused to revisit a 1976 ruling that declared that records held by third parties like banks aren’t subject to privacy rights. The case involved an IRS summons that forced Coinbase to release the transaction information of over 14,000 customers
Meanwhile, it is worth mentioning that the Trump administration is also looking to scrap other unfair rules besides the crypto reporting rule. Senator Cynthia Lummis just introduced the Digital Asset tax legislation to eliminate double taxation on mining and staking transactions.
Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across several niches. His speed and alacrity in covering breaking updates are second to none. He has a knack for simplifying the most technical concepts and making them easy for crypto newbies to understand.
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Source: https://coingape.com/us-treasury-scraps-crypto-broker-reporting-rule-for-defi-platforms/