Republicans seek to overturn IRS crypto broker rule

Corresponding resolutions were introduced to “roll back the disastrous” rule requiring custodial brokers to report transactions

article-image

AevanStock/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


Congressional Republicans are working to reverse new IRS guidelines that require so-called “custodial brokers” to report transactions. 

Rep. Mike Carey and Sen. Ted Cruz this week introduced corresponding resolutions seeking to “roll back the disastrous IRS broker rule.” 

The legislation comes weeks after a group of crypto lobbying firms sued the IRS over the rule. They claim the requirement “exceeds the agencies’ statutory authority, violates the Administrative Procedure Act (“APA”) and is unconstitutional.” 

As it currently stands, starting in 2025, custodial brokers are required to report gross proceeds. In 2026, they will have to report cost basis for certain transactions. 

The final version of the 1099-DA form was published at the end of last year. While earlier drafts had included a section where brokers had to identify their “type” of business, the final form nixed this box. It’s a small change, but by cutting this section the IRS more or less punted the issue of DeFi actors. 

Even so, those opposed to the rule claim that the rule still imposes unfair reporting obligations on intermediaries and other actors in the crypto space. 

The resolutions have some co-sponsors (Sens. Cynthia Lummis and Tim Sheehy, to name a few), but neither have been scheduled for a markup or vote just yet. This is a hot-button issue in the crypto space though, so we’d expect companies to be directing a significant amount of their lobbying efforts here.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

The new SVM chain Zink uses zk tech and promises universal account profiles

article-image

DATs contributed to the increase in funding in July, which topped levels not seen since 2021

article-image

An SEC commissioner walks into a cypherpunk meetup…

article-image

Maple’s syrupUSDC will let traders earn passive income while using it to back perp positions on Solana

article-image

The platform’s bitcoin treasury gives it “competitive positioning” in spot and derivatives markets, VanEck portfolio manager says

article-image

Founder Michael Egorov reflects on the mystery, CRV’s role in DeFi, and what’s next