Frost Law
On April 10, 2025, President Trump signed House Joint Resolution 25 into law, disapproving of regulations (T.D. 10021) that required decentralized finance (DeFi) platforms and brokers to comply with Form 1099-DA, Digital Asset Proceeds From Broker Transactions, reporting for digital asset transactions. Utilizing the Congressional Review Act, the resolution passed the House on March 11 and the Senate on March 26 with vote totals reflecting significant bipartisan concern over the complexities and compliance burdens these regulations placed on DeFi entities. The disapproval prohibits the government from publishing any substantially similar rule in the future.
If you want to know more about the impact of the overturned DeFi tax reporting rules, please call our team at (410) 497-5947 or fill out our contact form.
Glen Frost’s Takeaways:
The bipartisan move to overturn the Form 1099-DA reporting rules for DeFi platforms is noteworthy. Recognition from both sides of the aisle signals the unique challenges and potential overreach of applying traditional broker reporting frameworks to this nascent space.
From a legal standpoint, this decision likely comes as a relief to many in the DeFi space who faced significant hurdles in adapting to these regulations. It underscores the need for thoughtful and nuanced regulatory approaches that consider the specific characteristics of emerging technologies. This rollback could foster further innovation and growth within the DeFi ecosystem by reducing compliance overhead.