US Treasury Considers Repealing Bitcoin Tax Reporting Rule, Signaling Potential Shift in Crypto Policy

Key Points

1. The repeal of the crypto broker rule TD 10021 removes the broker designation from crypto vendors, reducing regulatory burdens and fostering innovation in the US crypto ecosystem.

2. The rule would have imposed substantial reporting obligations on decentralized platforms, potentially undermining their decentralized nature, but the Treasury clarified it would not apply to self-custody users.

3. Industry leaders welcomed the repeal, noting that Bitcoin held in self-custody remains unaffected by KYC requirements, preventing an IRS dragnet on decentralized platforms.

4. The repeal aligns with broader regulatory shifts, including the removal of sanctions on Tornado Cash and easing of Federal Reserve restrictions, indicating a more favorable stance toward crypto.

5. While the repeal removes a significant hurdle, future crypto tax regulation will still need to balance transparency and innovation, with ongoing industry adaptation expected.