- Trump signed a law overturning the IRS DeFi broker rule finalized under Biden.
- The rule required DeFi platforms to report user data like traditional brokers.
President Donald Trump has signed a law repealing a Biden-era IRS rule that extended tax reporting requirements to decentralized finance (DeFi) platforms. The IRS rule, finalized in late 2024, aimed to treat DeFi operators as brokers and force them to report user transaction data. Although it was scheduled to take effect in 2026, critics warned it would harm crypto innovation and burden small developers.
Both chambers of Congress passed the resolution earlier this year under the Congressional Review Act. Lawmakers argued that the IRS rule imposed unrealistic technical demands on DeFi platforms. These platforms, unlike centralized exchanges such as Coinbase or Kraken, do not hold user identities or custody assets. Developers said the rule was impossible to enforce and risked pushing crypto development overseas.
Bipartisan Support and Trump’s Pro-Crypto
Republicans Sen. Ted Cruz and Rep. Mike Carey introduced the repeal measure. It gained support from both parties, including Senate Minority Leader Chuck Schumer. Despite Treasury’s estimate that repealing the rule could cost the government nearly $4 billion over ten years, lawmakers cited privacy, innovation, and technical feasibility as more important concerns.
Trump’s signature marks a key shift in U.S. crypto policy. His administration quickly moved to support the industry after taking office. Within weeks, Trump launched a federal crypto regulation working group. He also signed an executive order to create a national Bitcoin reserve.
The repealed rule required DeFi platforms to issue Form 1099 tax returns to users. It also obligated “front-end service providers” to report user trading data, even though DeFi protocols lack access to that information. The IRS rule stemmed from the 2021 Infrastructure Investment and Jobs Act, which targeted crypto tax compliance.
Carey, who attended the signing, called it the first crypto bill ever signed into law. He said the rule overwhelmed the IRS and compromised user privacy. Chairman Jason Smith emphasized that Congress, not regulators, writes tax law.
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