Congress has repealed digital asset regulations concerning tax reporting requirements for certain decentralized finance (DeFi) platforms functioning as noncustodial brokers. On April 10, President Donald Trump signed House Joint Resolution 25, terminating the guidance. This move was a big step toward preventing the implementation of harmful regulations that would apply to all digital asset sales occurring after January 1, 2027. The disapproval was passed using the Congressional Review Act (CRA).
House Joint Resolution 25 was aimed directly at the new reporting requirements for noncustodial digital asset brokers that would have applied to DeFi transactions. The CRA gives Congress a 60-day window to review and repeal any new regulation. Since the December 2024 rules fell within that window, they were fair game to be repealed.
The withdrawn regulations, had they gone into effect, would have created significant new tax reporting requirements for DeFi platforms that qualify as noncustodial brokers. These brokers serve as intermediaries during digital asset transactions while not necessarily taking custody of the digital assets themselves.
Previous rules, released on June 28, 2024, covered those operating in the digital asset industry that look and act like traditional securities brokers. These regulations were directed at institutions that hold customers’ digital assets and private keys in custody. Since the June 2024 regulations were issued after the 60-day period for repeal using the CRA, they are still in effect.
The difference between custodial and noncustodial brokers was important in deciding which regulations were eligible for repeal. As written, the December 2024 regulations only aimed at noncustodial brokers that transact business within DeFi platforms, effectively exposing them to the CRA rejection.
After this disapproval, the IRS cannot issue similar rules. Congress’s Congressional Review Act The CRA bars agencies from reissuing regulations that are substantially similar to any regulation that Congress has vetoed.
