Summary
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President Trump signed a resolution, marking the first crypto bill to become US law, effectively overturning a Biden-era IRS rule that would have imposed broker-like tax reporting on DeFi platforms.
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The repealed IRS “DeFi Broker Rule” was criticized for hindering American innovation and infringing on privacy, with lawmakers and industry leaders arguing it placed impractical burdens on decentralized finance.
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The resolution received strong bipartisan support in Congress and aligns with the Trump administration’s deregulatory approach, ensuring the IRS cannot reimpose similar rules without explicit Congressional authorization in the future.
President Donald Trump has signed legislation that invalidates an IRS rule concerning decentralized finance (DeFi) platforms.
This action, formalized on Thursday, repeals a regulation that would have required DeFi platforms to collect customer data and report cryptocurrency transaction information in the same manner as traditional brokers.
The announcement was made in a press release from Representative Mike Carey, who, along with Senator Ted Cruz, had introduced the resolution in December.
First Crypto Bill Signed into Law
The press release highlighted that this is the first cryptocurrency bill ever enacted into law and also the first Congressional Review Act (CRA) resolution related to tax matters to be signed into law.
Representative Carey stated that the DeFi Broker Rule unnecessarily hindered American innovation, violated the privacy of everyday citizens, and threatened to overwhelm the IRS with excessive filings.
He argued the IRS lacks the necessary infrastructure to manage this during tax season.
Carey thanked President Trump for signing the bill and acknowledged Crypto Czar Sacks for supporting America’s leading role in the developing crypto industry.
Resolution Targets “Gross Proceeds Reporting by Brokers” Rule
The measure, known as H.J.Res.25, specifically aims to nullify the IRS rule titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.”
This rule, established near the end of the Biden administration, broadened the definition of “broker” to encompass non-custodial entities such as DeFi platforms and front-end trading services.
Under this expanded definition, DeFi projects would have been mandated to report gross proceeds from cryptocurrency sales and gather taxpayer information, including identities and transaction histories.
DeFi Platforms Immediately Exempt from Reporting Requirements
The resolution’s enactment immediately rescinds the requirement for DeFi platforms and other digital asset brokers to report gross sales proceeds on Form 1099, rendering the rule ineffective.
This repeal alleviates compliance burdens that many in the cryptocurrency sector, like the Blockchain Association, have criticized as impractical and detrimental to innovation.
Bipartisan Support and Senate Action Preceded Signing
The measure had previously passed the Senate on March 4th, followed by the House the subsequent week.
Due to its connection to budgetary issues, a final Senate vote was needed before it could be presented to the President.
On March 26th, the Senate voted to repeal the controversial crypto tax rule, paving the way for President Trump’s signature.
Prevents Future Similar IRS Rules Without Congressional Approval
Under the Congressional Review Act, the IRS is prohibited from issuing a substantially similar rule without new authorization from Congress.
This clause effectively prevents the agency from reintroducing comparable reporting obligations on digital asset brokers without explicit congressional approval in the future.
Trump Administration Aligns with Deregulatory Stance on Crypto
President Trump’s signing of this resolution is consistent with his administration’s stance on deregulation, especially toward new technologies like cryptocurrencies.
Trump has increasingly expressed support for crypto during his 2024 campaign and current term, further solidifying his administration’s approach.
The White House, in a statement on March 4th, had already endorsed the resolution.
They asserted that the Biden-era rule negatively impacted American innovation, raised significant privacy concerns about taxpayer data, and imposed unreasonable compliance demands on DeFi companies.
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