Trump Repeals IRS DeFi Rule, Marking a Victory for U.S. Crypto Industry

In a major development for the U.S. crypto sector, President Donald Trump signed into law on April 10, 2025, a bill repealing an Internal Revenue Service (IRS) rule that aimed to impose stringent tax reporting requirements on decentralized finance (DeFi) platforms. The rule, finalized in December 2024 during the closing weeks of the Biden administration, sought to classify DeFi protocols as “brokers,” thereby subjecting them to the same reporting standards as centralized exchanges and traditional financial institutions.

The repeal was carried out through the Congressional Review Act, a legislative mechanism that allows Congress to overturn recently finalized federal agency rules. The Senate voted 70–27 in favor of the repeal on March 4, followed by a 292–132 vote in the House of Representatives on March 11. Lawmakers from both parties cited concerns over the technical impracticality of applying broker rules to decentralized systems, as well as potential privacy violations.

Industry Applauds Decision to Block DeFi Oversight Rule

The crypto industry broadly opposed the IRS measure, which would have required DeFi developers, protocol maintainers, and liquidity providers—many of whom operate pseudonymously and without centralized control—to collect and report user information to the IRS. The Blockchain Association, Coinbase, Uniswap, and a coalition of over 75 crypto entities argued that the regulation misapplied traditional financial definitions to innovative, non-custodial blockchain systems.

David Sacks, President Trump’s senior advisor on digital asset policy, labeled the IRS rule a “midnight regulation” that would have stifled innovation and driven blockchain development offshore. He welcomed the repeal as a necessary correction that would enable U.S.-based platforms to remain competitive globally.

Repeal Signals Pro-Crypto Policy Shift in Washington

The repeal of the IRS DeFi rule comes as the Trump administration moves to establish a more favorable regulatory climate for digital assets. Alongside the repeal, the administration has also announced plans to form a federal cryptocurrency working group and explore a national Bitcoin reserve strategy.

With the IRS rule officially overturned, DeFi protocols are no longer obligated to report user transaction data to federal tax authorities. This decision has been praised by the industry as a victory for privacy, innovation, and practical governance. Analysts expect the move to lower compliance burdens, boost institutional confidence, and potentially accelerate the adoption of decentralized technologies within the U.S.

However, the decision has also raised concerns among lawmakers and financial oversight advocates who warn that the lack of regulatory clarity could contribute to tax evasion and financial crimes. As DeFi continues to evolve rapidly, the broader debate around how best to regulate blockchain-based financial systems is far from settled.

For now, the repeal marks a significant political and regulatory milestone, underscoring a shift in Washington’s approach to crypto under the Trump administration.