Trump Overturns Controversial IRS Rule—Crypto and DeFi Get Green Light
In a historic move for the crypto industry, President Donald Trump has signed legislation repealing an IRS regulationthat had sparked backlash across the decentralized finance (DeFi) ecosystem. The rule, introduced during the final days of President Joe Biden’s administration, sought to classify DeFi platforms as brokers, forcing them to track and report user transactions.
Now, with strong bipartisan support from both the House and Senate, that regulation has been officially struck down—marking one of the first direct legislative victories for crypto under Trump’s leadership.
What Was the IRS Crypto Rule?
The repealed rule stemmed from a broader crypto tax initiative rolled out in 2024. It aimed to expand the definition of “broker” to include decentralized exchanges (DEXs) and other DeFi platforms. Under this interpretation, platforms would be legally obligated to collect personal data on users and report it to the IRS—despite lacking the infrastructure to do so.
Unlike traditional5 exchanges like Coinbase or Binance, DeFi platforms are built on blockchain technology that enables peer-to-peer trading, meaning users interact with smart contracts rather than centralized services. This makes it virtually impossible for these platforms to identify users or monitor transactions in the way traditional brokers can.
Crypto advocates quickly pushed back, calling the rule “outdated,” “unworkable,” and a threat to innovation in the blockchain space.
Congress Sends a Clear Signal: DeFi Deserves Protection
In March, both chambers of Congress invoked the Congressional Review Act to overturn the IRS rule—a rare show of unity across party lines. The Act allows lawmakers to reverse recently implemented federal regulations by a simple majority vote.
The vote signaled growing political support for digital assets in Washington. Lawmakers acknowledged that forcing DeFi platforms to act like brokers would not only stifle innovation but also fail to reflect how decentralized systems actually function.
Trump Reinforces His “Crypto President” Agenda
By signing the repeal7 into law, President Trump delivered on his campaign promise to foster a crypto-friendly environment in the U.S. This decision comes on the heels of several pro-crypto actions by the Trump administration, including:
- A March executive order to build a national Bitcoin reserve
- The formation of a federal crypto task force to design forward-thinking digital asset regulations
These moves underline Trump’s intention to position the U.S. as a global leader in blockchain and Web3 development.
What’s Next: Stablecoin Regulation in Focus
With the IRS reporting rule now in the rearview mirror, lawmakers are turning their attention to the next regulatory frontier—stablecoins. Talks are already underway in Congress, and insiders say a stablecoin bill could be on the President’s desk by August.
Industry leaders view this momentum as a major opportunity to push for clear, innovation-friendly crypto laws that support growth while protecting users.
Final Thoughts: A Turning Point for U.S. Crypto Policy
The repeal of the IRS’s DeFi regulation isn’t just a short-term win—it’s a signal that the U.S. government is starting to embrace the digital economy. With growing interest from lawmakers, increasing clarity around tax policy, and a President signaling clear support, the future of crypto in America looks brighter than ever.
DeFi is here to stay, and for the first time in years, the regulatory environment may be catching up to the technology.
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