Trump Signs Law Repealing IRS DeFi Broker Rule

In a landmark move for the cryptocurrency industry, Donald Trump signed the first-ever crypto-specific bill into law on April 10, 2025. This historic legislation repeals a contentious IRS rule that targeted decentralized finance (DeFi) platforms, marking a significant shift in the regulatory landscape for digital assets in the United States.

The repealed rule, implemented during the final days of the Biden administration, classified DeFi exchanges as brokers, mandating them to collect and report user data to the IRS. This regulation was part of broader efforts to enhance crypto tax reporting, stemming from the 2021 Infrastructure Investment and Jobs Act. The aim was to prevent tax evasion by expanding reporting requirements to DeFi exchanges. However, the crypto community and lawmakers argued that this rule unfairly constrained innovation and privacy, as DeFi platforms lack intermediaries and cannot comply with such regulations.

Both the House and Senate voted to overturn the rule using the Congressional Review Act, which allows Congress to reverse new federal regulations with a simple majority. The Trump administration supported this legislation, viewing it as crucial for protecting American innovation and privacy. This repeal is expected to alleviate concerns about the future of DeFi and may open the door for more crypto-friendly policies, including potential stablecoin regulation.

Despite the industry's celebration, Democrats have expressed concerns that the repeal could weaken the IRS’s ability to enforce tax compliance, potentially leading to increased tax evasion. This perspective contrasts with stricter measures in the EU and OECD. The focus now shifts to broader crypto legislation, such as regulating stablecoin issuers and establishing market protocols for cryptocurrency transactions. Proposals are moving through committees in both the House and Senate, with the aim of combining these initiatives into a unified compromise.

The repeal of the DeFi Broker Rule is a significant victory for the crypto industry, which has long advocated for clearer and more favorable regulatory frameworks. By shielding DeFi exchanges from IRS oversight, the new law is expected to foster greater innovation and adoption of decentralized financial services. This move aligns with Trump's broader stance on cryptocurrencies, which has been generally supportive of the technology's potential to disrupt traditional financial systems.

The signing of this resolution is particularly noteworthy as it represents the first time a crypto bill has been enacted into law in the United States. This development underscores the growing importance of cryptocurrencies in the national discourse and the need for legislative action to address the unique challenges and opportunities they present. The repeal of the DeFi Broker Rule is likely to have far-reaching implications for the crypto industry, as it sets a precedent for future regulatory decisions and signals a more favorable environment for DeFi innovation.