On December 27, 2024, DEF, the Blockchain Association, and the Texas Blockchain Council filed a lawsuit in the U.S. District Court for the Northern District of Texas, challenging the IRS and Treasury Department’s final “broker” midnight rulemaking on the basis that the rulemaking exceeds the agencies’ statutory authority, violates the Administrative Procedure Act, and is unconstitutional.
DEF, alongside BA and TBC, sought declaratory and injunctive relief to protect innovation and ensure regulatory clarity for decentralized finance.
Status: The case was terminated per stipulation of voluntary dismissal, following the U.S. Senate’s bipartisan 70–27 passage of S.J. Res. 3 disapproving the IRS “Broker Rule” under the Congressional Review Act.
Voided IRS Broker Rule: Background & Timeline
On December 27, 2024, the Treasury Department and the Internal Revenue Service (IRS) finalized reporting requirements redefining the statutory term “broker” to reach anyone who provides a “trading front-end service” or “other effectuating services” related to digital assets, even if they do so for free and if the service does not itself effectuate transactions (the “DeFi Broker Rule”). Under this definition, non-custodial service providers would need to collect information about users’ trades and follow onerous reporting requirements designed for traditional securities brokers for every transaction.
On the same day, DEF, together with the Blockchain Association and the Texas Blockchain Council, filed a lawsuit against the Treasury Department and the IRS challenging the rulemaking for violating the Administrative Procedure Act.
On April 10, 2025, the DeFi Broker Rule was repealed under the Congressional Review Act (CRA), which allows Congress to nullify recently issued federal rules. As a result, plaintiffs voluntarily dismissed the lawsuit as moot.
Background Timeline of Related Events
The Treasury Department and the IRS issue final regulations, “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions,” requiring “DeFi brokers” to report on the gross proceeds of the sale of their digital assets.
DEF, the Blockchain Association, and the Texas Blockchain Council file a lawsuit in the U.S. District Court for the Northern District of Texas against the Treasury Department and the IRS on the basis that the rulemaking exceeds the agencies’ statutory authority, violates the Administrative Procedure Act, and is unconstitutional.
Congress advances a joint motion for disapproval of the DeFi Broker Rule (H.J.Res.25) under the CRA procedures to nullify the final regulations.
President Trump signs H.J.Res.25 into law which overturns the DeFi Broker Rule, meaning the regulations have “no legal force or effect.”
The Treasury Department and the IRS formally revoke the DeFi Broker Rule and remove the rules from the Code of Federal Regulations.