The US Treasury has formally rescinded Internal Revenue Service regulation TD 10021, eliminating the controversial broker designation for cryptocurrency vendors. This significant reversal substantially reduces regulatory compliance requirements across the crypto sector.
The repealed rule would have imposed extensive broker-like reporting obligations on decentralized platforms, potentially compromising their operational frameworks. Treasury officials clarified that self-custody wallet users remain explicitly exempt from these requirements.
Industry stakeholders welcomed the decision, emphasizing that Bitcoin holders maintaining personal custody won’t face new KYC obligations. The reversal prevents potential IRS enforcement actions against decentralized platforms and aligns with recent regulatory shifts including sanctions relief for Tornado Cash and modified Federal Reserve restrictions.
While removing a major compliance hurdle, the repeal highlights ongoing challenges in developing balanced tax frameworks that safeguard transparency without stifling innovation. Further industry adaptation is anticipated as crypto tax policies continue to evolve.