diff --git a/changelog.d/7961.bugfix b/changelog.d/7961.bugfix
new file mode 100644
index 0000000000..b21f8e1f14
--- /dev/null
+++ b/changelog.d/7961.bugfix
@@ -0,0 +1 @@
+Fix a long standing bug where the tracing of async functions with opentracing was broken.
diff --git a/synapse/logging/opentracing.py b/synapse/logging/opentracing.py
index 2101517575..21dbd9f415 100644
--- a/synapse/logging/opentracing.py
+++ b/synapse/logging/opentracing.py
@@ -737,24 +737,14 @@ def trace(func=None, opname=None):
 
             @wraps(func)
             async def _trace_inner(*args, **kwargs):
-                if opentracing is None:
+                with start_active_span(_opname):
                     return await func(*args, **kwargs)
 
-                with start_active_span(_opname) as scope:
-                    try:
-                        return await func(*args, **kwargs)
-                    except Exception:
-                        scope.span.set_tag(tags.ERROR, True)
-                        raise
-
         else:
             # The other case here handles both sync functions and those
             # decorated with inlineDeferred.
             @wraps(func)
             def _trace_inner(*args, **kwargs):
-                if opentracing is None:
-                    return func(*args, **kwargs)
-
                 scope = start_active_span(_opname)
                 scope.__enter__()
 
@@ -767,7 +757,6 @@ def trace(func=None, opname=None):
                             return result
 
                         def err_back(result):
-                            scope.span.set_tag(tags.ERROR, True)
                             scope.__exit__(None, None, None)
                             return result
 
diff --git a/synapse/logging/scopecontextmanager.py b/synapse/logging/scopecontextmanager.py
index dc3ab00cbb..026854b4c7 100644
--- a/synapse/logging/scopecontextmanager.py
+++ b/synapse/logging/scopecontextmanager.py
@@ -116,6 +116,8 @@ class _LogContextScope(Scope):
         if self._enter_logcontext:
             self.logcontext.__enter__()
 
+        return self
+
     def __exit__(self, type, value, traceback):
         if type == twisted.internet.defer._DefGen_Return:
             super(_LogContextScope, self).__exit__(None, None, None)