In a landmark move involving the IRS DeFi broker rule, US President Donald Trump has officially signed a resolution that repeals the controversial regulation introduced during the final days of the previous administration. The rule would have significantly expanded the definition of “broker” to include decentralized finance (DeFi) platforms, placing them under the same tax reporting obligations as centralized exchanges.
This repeal, which is the first crypto-related law signed into law, is being seen as a major win for digital asset advocates and a pivotal moment for the future of blockchain innovation in the United States.
What Was the IRS DeFi Broker Rule?
The IRS DeFi Broker Rule required DeFi protocols and other non-custodial platforms to report gross proceeds from cryptocurrency transactions. This included collecting user data such as identities and transaction history – something that DeFi projects argued they could not reasonably do.
Unlike centralized exchanges that act as intermediaries, DeFi platforms enable peer-to-peer trading directly on blockchain networks. These decentralized systems do not maintain user accounts or individual records, making compliance with the IRS’s original reporting demands technically and logistically challenging.
The rule was part of a broader tax compliance initiative stemming from the Infrastructure Investment and Jobs Act of 2021 that aimed to close loopholes and increase tax revenue from the growing digital asset economy.
Strong bipartisan support for repeal
The repeal passed both houses of Congress under the Congressional Review Act, which allows lawmakers to repeal recent federal regulations. Despite its origins under the previous administration, the IRS DeFi broker rule faced sharp criticism from both parties for being unworkable, overly aggressive, and detrimental to innovation.
The Senate passed the proposal on March 26, while an earlier version was approved in early March. The House approved its version on March 11 after a swift journey through the Ways and Means Committee. A final vote in the Senate was necessary due to the rule’s financial implications, sealing the deal before it reached the president’s desk.
Trump’s crypto-friendly stance
Trump’s decision to sign the bill is in line with his ongoing pro-crypto policy agenda. Since returning to office, he has made bold promises to support the digital asset sector, even ordering the creation of a cryptocurrency working group and signing an executive order to create a federal Bitcoin Reserve.
By repealing the IRS DeFi broker rule, Trump has sent a strong message that his administration favors a regulatory environment that fosters innovation without compromising privacy or imposing excessive compliance burdens.
UPDATE: As promised, President Trump has signed the bill to repeal the DeFi Broker Rule. Congratulations to @SenTedCruz, @RepMikeCarey, and @RepBryanSteil for steering the resolution through Congress. https://t.co/SugdszjIPp
— David Sacks (@davidsacks47) April 11, 2025
One industry leader said, “This rule promised to end the United States crypto industry; it was a massive blow to the engine of American innovation.” Now, with the rule repealed, the DeFi sector can continue to grow without the looming threat of regulatory encroachment.
Implications for the Industry
With the repeal of the IRS DeFi broker rule, decentralized platforms no longer need to submit Form-1099 filings or track user data in ways they are not equipped to handle. This provides a huge relief to developers, builders, and users in the crypto ecosystem.
Industry groups like the Blockchain Association have been vocal critics of the rule and even filed legal challenges against it, claiming it is an unconstitutional expansion of IRS authority. Now that the rule is officially repealed, these legal efforts can be dropped in favor of a collaborative dialogue with regulators.
Importantly, under the Congressional Review Act, the IRS is prohibited from introducing substantially similar rules in the future without the direct approval of Congress. This ensures a long-term win for DeFi projects and gives the industry an opportunity to innovate responsibly.
A turning point for crypto regulation
This legislative action can be seen as a turning point in the US’s approach to digital asset regulation. Rather than forcing decentralized systems into outdated compliance models, the focus can now shift to developing smarter, more tailored regulation that acknowledges the unique nature of blockchain-based technologies.
By signing off on repealing the IRS DeFi broker rule, the Trump administration is clearly establishing itself as a supporter of crypto freedom and technological progress. Whether this momentum will lead to further legislative victories for the industry remains to be seen – but for now, the crypto community is celebrating a hard-earned win.
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