Trump Signs Bill to Repeal Controversial IRS DeFi Tax Rule
On April 10, 2025, U.S. President Donald Trump signed a joint resolution from Congress, officially repealing the controversial cryptocurrency tax legislation targeting DeFi operators established by the IRS during the Biden administration. This action not only symbolizes a significant shift in the United States’ stance on cryptocurrency policy but also marks the first bill focused on the cryptocurrency sector to be signed into law by a president.
Repeal of IRS DeFi Tax Rules: A Victory for Innovation and Privacy
The IRS rules, originally set to take effect in 2027 and described by Trump as “the apocalypse bill,” were passed at the end of December last year, coinciding with the Biden administration’s departure. The rules aimed to expand existing tax reporting obligations by requiring all DeFi protocol platforms to report transaction data for all users, specifically including:
- Mandating certain DeFi operators to report user personal data and transaction details like traditional brokers.
- Forcing operators to send 1099 forms, which report non-employee income (such as gambling winnings, rent, royalties, etc.).
- Applying to platforms or websites that provide an “interface” for users to access DeFi, rather than targeting DeFi protocols directly.
This move triggered widespread criticism from the industry, which viewed it as a direct threat to the DeFi sector and feared it could force industry professionals to leave the United States.
HISTORY MADE
Just now, @POTUS signed my bill to repeal the IRS DeFi Crypto Broker Rule. This is the first cryptocurrency bill EVER signed into law by a president. @HouseGOP is working to keep America as the crypto capital of the world!
— Congressman Mike Carey (@RepMikeCarey) April 10, 2025
Republican Congressman Mike Carey, a supporter of the resolution, expressed his excitement on X, stating: “The DeFi broker rule unnecessarily hinders American innovation, infringes on the privacy of Americans, and would place an unbearable reporting burden on the IRS during tax season.”
Support and Opposition: Divided Political Stance
While most Republicans and the cryptocurrency industry supported the repeal of the rule, some Democratic lawmakers held differing views. Democratic Congressman Lloyd Doggett stated in March: “If this rule is abolished, it could create a loophole for the wealthy to evade taxes.” However, industry insiders were generally optimistic that Trump would eventually repeal the law, especially since White House AI and crypto czar David Sacks indicated last month that he would recommend Trump sign a proposal to overturn the law.
Indeed, the resolution passed the House Ways and Means Committee on February 25, was voted through the House on March 11, and received Senate approval on March 26.
Trump’s demonstration of a pro-crypto stance allows the industry to breathe a sigh of relief. Kristin Smith, CEO of the Blockchain Association, stated in a release: “Innovators, builders, and developers in the industry can finally breathe a sigh of relief. This IRS rule was like a sledgehammer, nearly striking the engine of American innovation.”
Last December, the association, along with the DeFi Education Fund, filed a lawsuit against the IRS and the Treasury, accusing the rule of being illegal and constituting “unconstitutional overreach.”
The passage and signing of this resolution symbolize the Trump administration’s friendly attitude towards cryptocurrency policy. Not only opposing this rule, but his administration is also seeking to adjust the organizational structure and regulatory direction of the SEC, which has begun to roll back several enforcement actions against cryptocurrency operators initiated during the Biden administration and is engaging in multiple regulatory consultations with the industry.
Risk Warning
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