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The tax agency first published new proposed regulations on tax reporting requirements for cryptocurrency brokers in August 2023, stoking fears that ambiguous language could harmfully impact many parts of the crypto industry from wallet providers to decentralized exchanges.

“Good news: They agree that custodial brokers are, well, brokers,” Coin Center Chief Communications Office Neeraj Agrawal said in a post on X. “Our concern is whether or not a self-custodial application (like a DEX) that is just code with no central authority would be considered a broker too.”

In other words, exchanges like Kraken and Coinbase will be subject to the new rules, which will go partially into effect in 2025. However, rules that would have imposed potentially impossible and privacy-invasive reporting and KYC requirements on decentralized, non-custodial protocols will wait and see.