Some DeFi users read the headlines in 2025 and concluded the IRS had backed off decentralized finance. It did not. Congress repealed a reporting rule. It did not repeal any tax.
The distinction matters, because the repeal makes DeFi users more responsible for their own reporting, not less.
What the rule was
In December 2024, the Treasury issued final regulations, T.D. 10021, titled Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales. They would have required certain persons providing services that effectuate digital asset sales in decentralized finance to file information returns and furnish payee statements reporting gross proceeds on dispositions of digital assets effected for customers.
These were separate from the main broker regulations, T.D. 10000, issued in July 2024, which cover custodial platforms such as centralized exchanges, certain hosted wallet providers, certain payment processors and digital asset kiosks.
What Congress did
Under the Congressional Review Act, Congress passed a joint resolution disapproving the DeFi rule. It was enacted as Public Law 119-5, signed on April 10, 2025. In a Federal Register document published July 11, 2025, the Treasury and IRS stated that, because of the joint resolution, the rule has no legal force or effect. That document removed the rule's amendments from the Code of Federal Regulations and restored the section 6045 regulation text that was in effect before the rule.
The timeline
- July 2024: T.D. 10000 published, covering custodial brokers and the basis and identification rules for digital assets.
- December 30, 2024: T.D. 10021 published, covering certain decentralized finance participants.
- April 10, 2025: Public Law 119-5 enacted, disapproving T.D. 10021.
- July 11, 2025: Federal Register document removes the T.D. 10021 amendments and restores the prior regulation text.
Who is still a broker
The remaining regulations describe hosted and unhosted wallets in Treas. Reg. 1.6045-1(a)(25). A hosted wallet is a custodial service that stores private keys for others. An unhosted wallet is a non-custodial means of storing your own keys, whether a hot wallet connected to the internet or a cold wallet that is not. As Notice 2024-57 summarizes, the custodial rules reach digital asset trading platforms, certain processors of digital asset payments, certain hosted wallet providers and digital asset kiosks. Your own unhosted wallet is not a broker, and neither are you.
What did not change
- The tax law. Digital assets are property. Swaps, sales and other dispositions produce gain or loss under section 1001 and Treas. Reg. 1.1001-7. Rewards are income when received. Nothing in the repeal touched any of that.
- The custodial broker rules. T.D. 10000 remains. Custodial brokers report gross proceeds on Form 1099-DA for sales on or after January 1, 2025, and basis for covered digital assets sold on or after January 1, 2026. See Form 1099-DA explained.
- The identification and basis rules. Treas. Reg. 1.1012-1(j) and (h) still apply to all digital assets, including those used in DeFi.
- The digital asset question on Form 1040, which covers DeFi activity as much as any other.
- Your obligation to report all taxable transactions whether or not you receive an information return.
What the repeal means in practice
Decentralized protocols and front ends will not be sending you Forms 1099-DA under the repealed rule. Separately, Notice 2024-57 says even custodial brokers are not required, for now, to report wrapping and unwrapping, liquidity provider transactions, staking, crypto lending, short sales and certain notional principal contracts, effective for transactions on or after January 1, 2025.
Put together, a large share of on-chain activity produces no third-party paperwork at all. The tax consequences are the same as if it did. The difference is that you are the only one keeping the books.
Where on-chain activity becomes visible anyway
On-chain activity still touches custodial platforms at the edges. When you buy crypto at an exchange and withdraw it to a self-custody wallet, the exchange knows. When you move tokens back to an exchange and sell, the exchange reports proceeds and, for transferred-in units, the transfer-in date and number of units under Treas. Reg. 1.6045-1. A sale reported without basis invites the question of where the basis is. The answer is in your DeFi records. See covered vs. noncovered digital assets.
Building your own reporting
- List every self-custody address you use for DeFi.
- Export the full transaction history for each address, with hashes.
- Classify each transaction: swap, deposit, withdrawal, claim, fee, transfer between your own wallets.
- Apply your positions on unsettled questions consistently. See DeFi liquidity pools and liquid staking tokens.
- Value each event at the time it happened, from a consistent source.
- Report dispositions on Form 8949 using the boxes for transactions with no Form 1099-DA, which for 2025 are box I for short-term and box L for long-term.
- Report rewards and other income as ordinary income. See where to report crypto.
A worked example
In 2026 you withdraw 5 ETH from an exchange to your wallet, swap 2 ETH for a governance token on a decentralized exchange, provide liquidity with the rest, claim incentive rewards, then send the governance token back to the exchange and sell it.
- Exchange withdrawal: no tax on the transfer itself; any fee paid in ETH is a disposition.
- DEX swap: a taxable disposition of 2 ETH, no Form 1099-DA, reported by you in box I or L.
- Liquidity deposit and later withdrawal: handled under your chosen position, no Form 1099-DA.
- Incentive rewards: ordinary income at value when claimed, no Form 1099-DA.
- Selling the governance token on the exchange: reported on Form 1099-DA with proceeds and, because it was transferred in, no basis. Your basis is the value of the 2 ETH you gave up in the swap.
Four of five events produce no form. All five belong on your return. And the one form you do receive, for the final sale, shows proceeds with no basis. Without your own record of the swap, that sale would look like pure gain. Your DeFi records are what turn a misleading form into an accurate return.
Past DeFi years
If you were active in DeFi in earlier years and did not report those transactions because nobody sent a form, the repeal does not help. The transactions were taxable then and remain taxable now. The fix is to rebuild those years from on-chain history and amend where needed. Filing before the IRS contacts you about a year can also affect the penalty math. See amending a return to report crypto and qualified amended returns.
Tools that help
Because there is no statement, your sources are the blockchain itself and whatever your wallet software exports. Block explorers show every transaction for an address with its timestamp and hash. Crypto tax software can import addresses and classify many transactions automatically, but it guesses on unusual contract interactions, and the guesses are only as good as the rules you set. Review the classifications, especially for deposits into pools and staking contracts, before relying on the output. See the existing guide on crypto tax software limits.
What the IRS can still see
No form does not mean no visibility. Public blockchains are public. Custodial platforms at the on-ramps and off-ramps report what passes through them. A taxpayer who withdraws large amounts from an exchange to a self-custody wallet and later deposits different tokens back has left a visible trail at both ends. The safest assumption is that anything on a public ledger can be connected to you eventually, and that your return should be able to explain it.
The takeaway
The repeal settled who reports. It did not settle anything about what is taxed. If anything, it raised the value of good records, because there will be fewer third-party documents to rebuild from later. Keep the books yourself, keep them wallet by wallet, and keep them as you go. See crypto record-keeping.
Frequently asked questions
Was the DeFi broker reporting rule repealed?
Yes. Congress disapproved T.D. 10021 under the Congressional Review Act in Public Law 119-5, signed April 10, 2025. The Treasury removed the rule from the regulations in a document published July 11, 2025.
Does the repeal mean DeFi transactions are not taxable?
No. The repeal affected only who must file information returns. Swaps, sales and rewards in DeFi are taxed under the same rules as before.
Do centralized exchanges still issue Form 1099-DA?
Yes. The custodial broker rules in T.D. 10000 were not affected. Brokers report gross proceeds for sales on or after January 1, 2025, and basis for covered assets sold on or after January 1, 2026.
How do I report DeFi swaps with no Form 1099-DA?
On Form 8949 using the boxes for digital asset transactions with no Form 1099-DA. For 2025 those are box I for short-term and box L for long-term.
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