Trump Signs Resolution Overturning IRS DeFi Broker Rule in Historic First for U.S. Crypto Legislation

Trump Overturns IRS DeFi Broker Rule, Marking Historic Win for Crypto Industry

U.S. President Donald Trump has officially signed a joint congressional resolution that repeals a Biden-era IRS rule targeting decentralized finance (DeFi) platforms. The now-defunct rule, which was slated to take effect in 2027, would have required DeFi protocols to report users’ transaction data to the Internal Revenue Service—sparking widespread concern among crypto advocates and developers.

The IRS DeFi broker rule sought to expand existing tax reporting requirements, mandating that DeFi platforms disclose gross proceeds from crypto sales, including detailed taxpayer information. Critics argued the rule was overly broad and threatened innovation, privacy, and the foundational principles of decentralized finance.

Source: Mike Carey

Ohio Representative Mike Carey, a key sponsor of the resolution, announced that the repeal is the first time a crypto-focused bill has ever been signed into U.S. law.

“The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season,” Carey said in a statement.

The resolution swiftly made its way through Congress. It passed the House Ways and Means Committee on February 25, followed by House approval on March 11. The Senate passed its version on March 26, after procedural adjustments were made due to constitutional rules regarding budget measures.

President Trump’s signature was anticipated, especially after his crypto and AI advisor David Sacks confirmed in March that the administration supported dismantling the rule.

Kristin Smith, CEO of crypto advocacy group Blockchain Association, hailed the repeal as a lifeline for the industry.

Kristin Smith claimed the IRS rule would have destroyed the US crypto industry. Source: Blockchain Association

“With this rule repealed, the industry’s innovators, builders, and developers can breathe again,” she said. “This rule promised an end to the United States crypto industry; it was a sledgehammer to the engine of American innovation.”

The Blockchain Association had previously filed a lawsuit against the IRS, the Treasury Department, and then-Treasury Secretary Janet Yellen in December, calling the rule an unconstitutional overreach.

This move reflects a broader shift in the Trump administration’s regulatory approach to digital assets. The administration has taken a friendlier stance toward crypto, actively reining in the Securities and Exchange Commission (SEC), which had previously ramped up enforcement actions under former Chair Gary Gensler. Several of those actions have since been dropped, and the agency has initiated a series of consultations with the crypto industry to guide future regulation.

While opponents like Democratic Representative Lloyd Doggett warned that repealing the rule could create tax loopholes for the wealthy, the decision is being widely celebrated by the blockchain community as a decisive step toward securing a more innovation-friendly regulatory environment in the U.S.