Congress Moves to Overturn Digital Asset Broker Reporting Rule: What Are the Implications for Businesses?

At a glance

• The main takeaway: A move from Congress seeks to roll back a December 2024 regulation that expanded digital asset reporting obligations.
• Impact on you: Remain vigilant to ongoing regulatory developments and seek professional guidance on structuring your operations to mitigate compliance risks.
• Next steps: Aprio’s Technology team can assist you with digital asset accounting and tax matters. Contact our team today.

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The full story:

A rule titled “Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales” is set to be overturned following bipartisan passage of disapproval resolutions in both the House of Representatives and the Senate. The move, undertaken under the Congressional Review Act (CRA), seeks to roll back a December 2024 regulation that expanded digital asset reporting obligations.

Background on the Rule and its Overturning

In 2021, Congress amended the Internal Revenue Code to clarify that broker information reporting requirements applied to transactions involving digital assets. The July 2024 regulations implemented these requirements, defining key terms such as U.S. digital asset broker, customer, and digital asset middleman.

While the July 2024 regulations established general gross proceeds and basis reporting rules for digital asset sales, the December 2024 regulations further expanded the definition of digital asset middleman to include non-custodial industry participants, such as decentralized finance (DeFi) trading platforms and providers of trading front-end services.

The revised definition aimed to capture persons (individuals and entities) that facilitate transactions but do not take custody of digital assets, ensuring that such participants report gross proceeds from digital asset sales. However, critics argued that the rule imposed an excessive burden on decentralized finance participants and failed to provide the Internal Revenue Service (IRS) with useful data for tax administration.

Congressional Action and Implications

On February 26, 2025, a markup in the House Ways and Means Committee caused lawmakers to raise concerns that the regulation would generate unnecessary compliance costs while offering little enforcement benefit. Supporters of repealing the rule contended that its broad scope could hinder innovation in the digital asset sector and unfairly burden participants in decentralized finance. Opponents, however, warned that reversing the regulation could create gaps in tax reporting, enabling market participants to engage in unreported digital asset transactions.

Despite these concerns, the House passed H.J. Res. 25 on March 11, 2025 by a 292-132 vote, with 76 Democrats joining Republicans in favor of repeal. The Senate followed suit on March 26, 2025, approving the measure with a bipartisan 70-vote majority. Under the CRA, once a rule is overturned, it is treated as if it had never taken effect, and a substantially similar rule cannot be reissued without new legislation.

See the Joint Committee on Taxation’s DESCRIPTION OF H.J. RES. 25, A JOINT RESOLUTION PROVIDING FOR CONGRESSIONAL DISAPPROVAL UNDER CHAPTER 8 OF TITLE 5, UNITED STATES CODE, OF THE RULE SUBMITTED BY THE DEPARTMENT OF THE TREASURY RELATING TO ‘‘GROSS PROCEEDS REPORTING BY BROKERS THAT REGULARLY PROVIDE SERVICES EFFECTUATING DIGITAL ASSET SALES” dated February 24, 2025 for additional information here.

Key Considerations for Taxpayers and Aprio Clients

• Compliance Relief for Non-Custodial Participants: If the resolution is enacted, non-custodial DeFi platforms, wallet providers, and trading front-end services will not be subject to broker reporting requirements under the December 2024 regulations.
• Existing Reporting Obligations Remain: The repeal does not affect the July 2024 regulations, meaning that custodial brokers and certain intermediaries will still be required to report gross proceeds and, beginning in 2026, basis information for digital asset transactions.
• Potential for Future Legislation: While this CRA action halts the expanded reporting requirements, Congress or the Treasury Department may pursue new regulatory frameworks addressing digital asset tax compliance.
• Taxpayer Record-Keeping Responsibilities: Despite the regulatory rollback, digital asset investors and businesses should maintain thorough records of transactions to ensure compliance with existing tax laws and prepare for any future reporting requirements.
• Industry Uncertainty and Strategic Planning: Aprio clients engaged in the digital asset space should remain vigilant to further regulatory developments and seek professional guidance on structuring their operations to mitigate compliance risks.

The bottom line

The resolution now awaits President Trump’s signature. If enacted, the December 2024 regulations will be nullified, but the original July 2024 regulations will remain in place. This would limit the scope of reporting obligations primarily to custodial brokers, while exempting non-custodial industry participants from the controversial expansion of the digital asset broker definition. The new CRA action underscores the ongoing policy debate over balancing regulatory oversight of digital asset transactions with fostering industry growth.

Have any questions? Schedule a general consultation to explore how Aprio can support your needs.

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