On December 30, 2024, the Department of the Treasury (the "Department") finalized regulations regarding information reporting by brokers who operate decentralized finance (DeFi) platforms in T.D. 10021. Those regulations required brokers who provide front-end services in DeFi transactions to file information returns and furnish payee statements reporting gross proceeds on dispositions of digital assets effected for customers in certain sale or exchange transactions. Transactions involving wrapping and unwrapping, liquidity providers, staking, lending, short sales, and notional principal contracts, however, were excepted from the reporting requirements. The newly created Form 1099-DA would have been required for all sales and exchanges subject to the new reporting requirements beginning January 1, 2025. Critics of the new rule argued that the reporting requirements were cumbersome and would harm the American cryptocurrency market.
Pursuant to its authority under the Congressional Review Act (CRA), Congress passed a joint resolution disapproving the final rule titled "Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales," and the President signed the resolution on April 10, 2025. Under the joint resolution and by operation of the CRA, T.D. 10021 has no legal force or effect. On July 11, 2025, the Department and the IRS removed this final rule from the Code of Federal Regulations (CFR) and reverted the relevant text of the CFR back to the text that was in effect immediately prior to the effective date of this final rule.
Broker is defined to include a dealer, a barter exchange organization, any person who (for consideration) regularly acts as a middleman with respect to property or services, and any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.
Thus, brokers other than decentralized or non-custodial brokers that do not take possession of the digital assets being sold or exchanged will remain subject to the reporting requirements under T.D. 10000. The key difference is that DeFi brokers, including decentralized exchanges, or those who effectuate smart contracts, decentralized applications, and automated market makers, will not be required to submit Forms 1099-DA. The final joint resolution also prohibits the Department from issuing similar rules in the future. The hope is that this will spur further innovation in the digital asset industry and develop more DeFi products.
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