- DeFi platforms are no longer required to collect or report user data.
- Congressional repeal blocks future IRS rule without legislative approval.
President Donald Trump signed a resolution reversing an IRS rule targeting decentralized finance (DeFi) platforms. The rule, finalized in December 2024 under the Biden administration, expanded the definition of “broker” to include DeFi services. It required these platforms to report user data and issue tax forms for non-employment income. This is a win for crypto advocates and the first crypto-related bill to be signed into law.
The resolution was introduced by Senator Ted Cruz and Representative Mike Carey and passed both chambers of Congress with bipartisan support. The Senate approved it on March 4, the House on March 11, and the Senate again on March 26. Trump’s signature means the rule has “no force or effect” and can’t be reinstated without Congress.
According to Mike Carey’s press release, the rule would have burdened DeFi platforms with obligations they can’t meet and create compliance issues for the IRS. The original IRS rule came from the 2021 Infrastructure Investment and Jobs Act, which aimed to improve tax reporting in the crypto space. It required brokers, including front-end service providers and non-custodial DeFi interfaces, to collect user information and report transactions on Form 1099.
President Trump called the rule a “midnight regulation” from the final days of the Biden administration. The White House had already signaled support for the repeal before the signing. Amanda Tuminelli, Executive Director at the DeFi Education Fund, said, “This protects developers and encourages innovation in the decentralized space.”
However, the IRS rule was met with intense backlash from crypto firms and users who said it couldn’t be implemented by DeFi protocols. These platforms lack centralized control and don’t have direct access to user identities. Trump’s signing comes as Washington is going through a regulatory shift. The Department of Justice disbanded its National Cryptocurrency Enforcement Team on April 8, and Paul Atkins, a crypto supporter, is waiting to be confirmed to lead the SEC.
Santiment pointed out a recent crypto dip as fears of a US-China trade war rose. They noted that when Trump previously said, “It’s a great time to buy,” it was 90 days before tariffs paused and the market rebounded. Maybe political signals will play out again.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
