The U.S. regulations on Bitcoin underwent a significant shift after the Treasury Department formally removed the reporting rules for cryptocurrency brokers. This decision, developed following the Congress vote and President Trump’s approval in April 2024, marks a turning point in the relationship between regulators and the DeFi world.
Official repeal of the rules on cryptocurrency brokers: a change of course for DeFi
The United States Department of the Treasury announced the cancellation of the rules that required specific participants in the DeFi sector to file tax returns, identifying them as traditional brokers. Published on December 30, 2024, the regulation “Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales” was supposed to come into effect on February 28, 2025.
The regulations required some decentralized platforms to provide detailed tax reports, causing alarm in the cryptocurrency ecosystem. However, under public law 119-5 and the Congressional Review Act, this rule is now devoid of any legal effect: it is considered as if it had never been adopted.
The restoration of the previous regulatory framework
With the repeal, the Treasury has completely removed the rule from the Code of Federal Regulations. Thus, the original text is reinstated, which excludes entities solely engaged in transaction validation on distributed ledger (decentralized ledgers) or in the sale of hardware for the custody of private keys from the obligations of reporting as broker.
This change addresses the strong criticisms from industry associations, such as the Blockchain Association and the Texas Blockchain Council, which had also initiated legal actions to challenge the rules deemed technically unfeasible for decentralized platforms.
Political clash: innovation or fiscal needs?
The battle over reporting standards for Bitcoin and DeFi has ignited the debate in Congress, between the need to combat tax evasion and the need not to stifle innovation. According to Treasury estimates, billions of dollars in taxes on cryptocurrencies went uncollected every year. However, many observers considered the new requirements technically unmanageable for many decentralized platforms.
The Republican campaign in favor of innovation
Senator Ted Cruz and Representative Mike Carey led the Congressional Review Act resolution, denouncing excessive government overreach that, in their view, risked pushing American development and innovation in the field of cryptocurrencies abroad.
Ted Cruz emphasized that regulation “could immediately harm American innovation and shift development overseas.” The chairman of the House Financial Services Committee, French Hill, highlighted that the requirement for broker disclosures would be particularly burdensome for DeFi software providers, who never handle user funds.
According to the Joint Committee on Taxation, however, the repeal of the rule could result in a loss of about 4 billion dollars over ten years for federal coffers. Nonetheless, for the bull supporters of DeFi in Congress, issues such as privacy, technical feasibility, and innovation have been prioritized over tax collection.
The White House and the governmental position
The head of crypto policy at the White House, David Sacks, described the repealed regulation as a “last-minute attack against the crypto community by the Biden administration.” For its part, the federal government has declared itself attentive to the needs of the crypto industry, promoting working groups on the regulation of digital assets.
The White House è lieta di annunciare il suo supporto per il CRA introdotto da @SenTedCruz e @RepMikeCarey per revocare la cosiddetta Broker DeFi Rule, un attacco dell’undicesima ora alla comunità crypto da parte dell’amministrazione Biden. pic.twitter.com/T7Hxasb4aC
— David Sacks (@davidsacks47) 4 marzo 2025
The main effect of the revocation, however, remains the blocking of possible future similar proposals by the IRS. The decision is thus considered a strategic victory for those who support a decentralized development of financial technologies.
Regulatory evolution in the United States and globally
The elimination of the rules on broker reporting represents just one of the elements in the increasing regulatory framework on Bitcoin. The Treasury has also announced exceptions for banks and brokerage firms, exempting them from the obligation to report clients’ crypto holdings in the balance sheets if they can demonstrate proper risk management related to digital assets.
At the same time, the SEC (Securities and Exchange Commission) has clarified that some crypto operations may not constitute liabilities for financial reporting purposes.
The weight of congressional pressures and state initiatives
The discussion took place on multiple fronts: Congress has exerted pressure to review the controversial accounting standard SAB 121, even though the presidential veto has blocked the implementation of the new proposals. Meanwhile, various states are proceeding independently: 23 American states have presented bills related to Bitcoin and 35 are in the process of evaluating further initiatives.
Among the most important initiatives, Kentucky Governor Andy Beshear signed the “Bitcoin Rights” law, strengthening the local regulatory framework and recognizing specific rights related to the management of this digital asset.
The international comparison: the case of Japan
Even abroad, the regulatory scenario is evolving rapidly. The Japanese Senate has recently approved changes that grant greater autonomy to crypto brokerage companies, introducing new operational categories and providing for lower regulatory barriers.
The reform also includes strengthened safeguards for customers and requires the approval of the prime minister for companies to maintain crypto assets at the national level, thus marking a new season of control and responsibility.
A more open future for Bitcoin and digital assets in the United States
The repeal of the broker reporting rules sanctioned by the United States Treasury, with the green light from President Trump, opens a new phase for Bitcoin and the entire crypto universe. This decision reflects the underlying tension between the need to ensure transparency and the desire to protect innovation.
The most favorable approach to the sector, with openings even at the federal level and increasing autonomy of the states, could favor the expansion of Bitcoin and DeFi technology in the USA. However, the focus on management capabilities and underlying risks remains central. Consequently, those operating in the sector will need to closely monitor upcoming regulatory developments and seize the opportunities offered by a rapidly evolving regulatory environment.