President Donald Trump signed a bipartisan bill on April 10, 2025, overturning a controversial IRS rule that would have imposed strict tax reporting requirements on decentralized finance (DeFi) platforms. The move, hailed as a major victory for the crypto industry, marks the first U.S. federal law targeting digital asset regulation and signals a shift toward fostering innovation in blockchain technology.
What Was the IRS DeFi Broker Rule?
The Biden-era rule, finalized in December 2024, aimed to treat DeFi platforms like traditional financial brokers. It required them to collect and report users’ transaction details—such as gross proceeds and taxpayer identities—to the IRS starting in 2027.
• Key Issue: DeFi platforms operate without centralized control, meaning they lack access to user data. Critics argued compliance was impossible and would stifle innovation.
• Industry Backlash: Crypto leaders warned the rule would force platforms overseas and overwhelm the IRS with unmanageable paperwork 1 2 3.
Why Did Congress Repeal the Rule?
The repeal passed with strong bipartisan support:
• Senate Vote: 70–28
• House Vote: 292–132
Lawmakers like Rep. Mike Carey (R-OH) called the rule a “bureaucratic overreach” that threatened privacy and innovation. “The IRS should focus on existing duties, not creating new hurdles,” he stated 4 5 6.
Implications for Crypto and DeFi
1. Privacy Protection: DeFi users no longer face mandatory data collection by platforms.
2. Regulatory Clarity: The repeal signals a more tailored approach to crypto regulation, acknowledging DeFi’s unique structure.
3. Innovation Boost: Developers can build decentralized tools without fearing unworkable reporting demands 7 8 9.
Industry Reactions
• Bo Hines (White House Crypto Council): “This repeal ushers in a golden age for digital assets.”
• Cardano’s Charles Hoskinson: Highlighted the need for collaborative tokenomics to compete with tech giants entering Web3 5 10.
Broader Context: Trump’s Pro-Crypto Agenda
Trump has positioned himself as a “crypto president,” taking steps like:
• Creating a federal Bitcoin stockpile.
• Establishing a crypto working group to draft balanced regulations 3 6.
What’s Next?
While the repeal removes immediate reporting burdens, experts urge lawmakers to craft rules that balance tax compliance with technological realities. As DeFi grows, expect more debates on privacy, innovation, and oversight.
Final Takeaway: This landmark law reflects growing political recognition of crypto’s economic potential—and a rejection of one-size-fits-all regulation. For now, DeFi breathes easier, but the path forward requires collaboration between innovators and policymakers.
