New Law Removes IRS Reporting Rules for DeFi Platforms

New Law Removes IRS Reporting Rules for DeFi Platforms

On April 10, 2025, the IRS rules that required DeFi platforms to report user information and transactions were officially repealed. These rules came from a law passed in 2021, but many in the crypto world believed they were unworkable and would hurt innovation.

What Changed?

The rules would have forced DeFi platforms — which operate without a central company or middleman — to collect personal information about users (known as “Know Your Customer” or KYC data) and send Form 1099-DA to the IRS, just like a traditional bank or broker. Now, those requirements no longer apply to DeFi platforms.

However, these changes do not apply to centralized exchanges. If you buy or sell crypto through a major platform that holds your funds (like Coinbase or Kraken), they will still need to send you a 1099-DA starting in 2026 for any transactions made in 2025. These platforms have already started asking users for more personal information to prepare for this change.

Other companies that handle crypto payments or create their own tokens may also still have reporting requirements.

What This Means for You

If you use a DeFi platform — like Uniswap, Aave, or MetaMask — to buy, sell, or swap digital assets, you likely won’t receive a 1099 form from the platform. But that doesn’t mean you’re off the hook with the IRS.

You’re still responsible for reporting your crypto transactions on your tax return. This includes gains or losses from trades, swaps, or sales — even if no one sends you a tax form. The IRS can still view activity on public blockchains, and mistakes or omissions could lead to penalties or audits.

Keep Good Records

Even casual investors should:

• Track all your crypto transactions and keep detailed records (dates, amounts, platforms used, and what you received or paid).

• Use crypto tax tools or software to help with calculations and reporting.

• Don’t rely on a single “wallet view” to track your gains — the IRS has already said this method isn’t good enough (see Revenue Procedure 2024-28).

Final Thoughts

While this repeal helps reduce complexity for DeFi users, the IRS continues to increase enforcement around crypto. With ongoing changes to tax rules both in the U.S. and abroad, staying informed and organized is key.

At Beaird Harris, we can help you navigate the tax implications of crypto investing. Whether you’re using a DeFi wallet or a centralized exchange, we’re here to make sure your tax reporting stays compliant — and stress-free.

If you have questions about your crypto activity or want help getting your records in order, reach out. We’re here to help.