Trump Repeals DeFi Reporting Rule, Boosts Crypto Industry

On April 10, US President Donald Trump signed a joint Congressional resolution to overturn a rule implemented during the Biden administration. This rule would have required decentralized finance (DeFi) protocols to report to the Internal Revenue Service (IRS). The rule, known as the "Broker Rule," mandated that DeFi platforms, including decentralized exchanges, file their gross proceeds from crypto sales and provide information on the parties involved in these transactions.

Trump's decision to sign the resolution was widely anticipated, as White House AI and crypto czar David Sacks had indicated in March that the president would support the repeal of this measure. The repeal of the "Broker Rule" is seen as a significant victory for the cryptocurrency industry, as it marks the first time a pro-crypto effort has successfully navigated through Congress. This move allows DeFi protocols to continue operating without the additional burden of regulatory compliance that the rule would have imposed.

The repealed rule posed substantial challenges for the DeFi ecosystem. DeFi protocols are decentralized and often lack a central authority, making it difficult to comply with traditional reporting requirements. The rule would have necessitated significant changes to the way these protocols operate, potentially stifling innovation and growth in the sector. The repeal of this rule is seen as a major step forward for the industry, as it provides regulatory clarity that supports innovation and the continued development of decentralized finance.

This development underscores the ongoing debate over how to regulate cryptocurrencies and digital assets. Some advocates push for stricter oversight, while others argue for a more hands-off approach that allows for innovation and growth. The repeal of the "Broker Rule" is likely to be seen as a win for those who believe in the potential of decentralized finance and the need for regulatory clarity that supports innovation. The resolution was passed by Congress and signed into law by President Trump, effectively nullifying the IRS's attempt to impose reporting requirements on DeFi protocols.