In a rare bipartisan move, Congress nullified the IRS rule that would have required decentralized finance (DeFi) platforms to report user transactions. Combined with 15 other rules eliminated by Treasury and the IRS, the regulatory pressure on crypto businesses has eased substantially. But do not mistake reduced regulation for no regulation. Here is what still applies.
What Was Nullified
The DeFi reporting rule would have classified decentralized exchanges and protocols as “brokers” under the tax code, requiring them to collect user information and file Forms 1099-DA reporting transaction proceeds. The rule was controversial because many DeFi protocols are automated smart contracts without a centralized operator capable of collecting KYC data. Congress used the Congressional Review Act to block the rule, and the President signed the resolution.
What Still Applies
The nullification of the DeFi rule does not eliminate crypto tax obligations. Every cryptocurrency transaction remains a taxable event. If you sell, trade, or exchange digital assets, you owe tax on any gain. If you receive crypto as payment for goods or services, it is ordinary income. If you mine or stake crypto, the fair market value at receipt is taxable income.
Centralized exchanges (Coinbase, Kraken, Gemini, etc.) are still subject to broker reporting requirements. The IRS has finalized rules requiring these platforms to issue Forms 1099-DA beginning with the 2026 tax year. If you use centralized exchanges, expect to receive reporting forms similar to what brokerage accounts provide for stock trades.
What This Means for Your Business
If your business accepts cryptocurrency payments, your obligations are unchanged: record the fair market value at the time of receipt, report it as income, and track the cost basis for future disposition. If you hold crypto on your balance sheet, track it as you would any other investment asset.
If you operate in the DeFi space, the immediate regulatory burden has lightened. But maintain clean records regardless. The IRS has access to blockchain analytics tools and has been issuing John Doe summonses to exchanges and platforms. The absence of third-party reporting does not mean the absence of enforcement.
The direction under this administration favors lighter regulation of crypto, but the underlying tax law has not changed. Report your transactions, pay your taxes, and keep records. That advice has not changed and is unlikely to change regardless of which party holds power.