Trump Repeals Biden-Era Crypto IRS Tax Rule
President Trump signed a bill repealing the IRS's DeFi Broker Rule, addressing concerns about innovation, privacy, and regulatory overreach in the crypto space.
Today, President Donald Trump signed a bill that repeals the Internal Revenue Service (IRS) Digital Assets Sale and Exchanges Rule, commonly known as the “DeFi Broker Rule.”
The legislation, spearheaded by U.S. Representative Mike Carey (R-Ohio-15), a member of the House Ways and Means Committee, and U.S. Senator Ted Cruz (R-Texas), effectively nullifies a regulation that would have imposed onerous reporting requirements on decentralized finance (DeFi) platforms and other entities within the cryptocurrency ecosystem.
Trump Nulify Biden-Era IRS Tax Rule
Representative Carey attended the signing ceremony, which marked the culmination of a bipartisan effort to address concerns regarding the rule’s potential impact on American innovation and the privacy of individuals engaging with digital assets.
This is the first time a law about cryptocurrency has been passed. It’s also the first time Congress has used a special tool (Congressional Review Act) to undo a tax-related rule.
Additionally, Carey said that the DeFi Broker Rule, finished in late 2024, went too far beyond what the Infrastructure Investment and Jobs Act told the IRS and Treasury Department to do about digital currency exchanges.
Moreover, the rule said that providers of digital wallets where people manage their currency and creators of software that doesn’t hold currency for users had to send many reports to the IRS.
“The DeFi Broker Rule made it harder for American innovation to happen, invaded the privacy of regular Americans, and would have overloaded the IRS with new paperwork that it’s not ready to handle during tax season.”
Representative Mike Carey asserted
By eliminating this bad rule, President Trump and Congress are letting the IRS focus on what it already needs to do for taxpayers instead of creating new red tape.” He also thanked President Trump for signing the bill and “Crypto Czar” Sacks for helping America stay a leader in the growing crypto industry.
The Congressional Review Act allowed Congress to cancel the rule and confirm what it originally meant in the Infrastructure Investment and Jobs Act.
Trump Administration Stance
The debated rule, “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales,” included non-custodial groups like DeFi platforms and trading services in the term “broker.” This would have forced DeFi projects to report income from crypto sales and gather taxpayer data, like identities and transaction history.
Furthermore, with H.J.Res.25 becoming law, the rule is now invalid, immediately stopping the reporting requirements for DeFi platforms and other digital asset brokers. This removes burdens seen as unworkable and harmful to new ideas in the crypto world.
President Trump’s bill signing agrees with his administration’s view on reducing regulations, especially for new technologies like cryptocurrency. The White House said on March 4 that the previous rule hurt American innovation, raised privacy issues for taxpayer data, and put too much pressure on DeFi companies.
