Trump Administration Moves to Overturn IRS DeFi Broker Rule

The Trump administration is making significant moves in the cryptocurrency space, signaling a shift toward a more industry-friendly regulatory environment. In a series of recent developments, the White House has announced its support for congressional efforts to overturn an IRS rule targeting decentralized finance (DeFi) platforms, while also preparing to host a high-profile crypto summit. The summit, set to take place in Washington, DC, will bring together key industry leaders, including executives from Coinbase, Kraken, and Chainlink, to discuss the future of digital assets in the US. 

Trump Administration Backs Effort to Rescind IRS DeFi Broker Rule

The White House has announced its support for congressional efforts to overturn the Internal Revenue Service (IRS) rule that classifies decentralized finance (DeFi) software providers as brokers. The move, championed by AI and crypto czar David Sacks, signals the Trump administration’s commitment to fostering innovation in the digital asset space while pushing back against regulatory measures deemed restrictive to the industry.

In a March 4 post on X, Sacks expressed the administration’s support for resolutions led by Texas Senator Ted Cruz and Ohio Representative Mike Carey under the Congressional Review Act. These resolutions seek to repeal an IRS rule that expands the definition of a “broker” to include software providers facilitating access to DeFi protocols.

Sacks noted that senior advisers to President Donald Trump would recommend signing the joint resolution, S.J. Res. 3, into law should it reach the president’s desk.

“This rule, issued as a midnight regulation in the final days of the previous Administration, would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies,” read a statement from the Office of Management and Budget (OMB) on March 4.

The IRS rule, introduced in December 2024 before Trump took office, was met with swift opposition from the crypto industry. Critics argue that the policy, set to be implemented in 2027, could drive companies offshore and hinder innovation within the DeFi sector.

Under the IRS framework, a DeFi platform facilitating digital asset exchanges and exerting influence over transactions could be classified as a broker. This classification would subject such entities to rigorous reporting obligations. The IRS estimates that between 650 and 875 DeFi brokers would need to start collecting and reporting user data beginning in 2026.

Crypto advocacy groups, lawmakers, and industry leaders have criticized the policy as overly broad and inconsistent with the decentralized nature of blockchain technology. They argue that forcing DeFi platforms to comply with broker regulations contradicts the fundamental principles of decentralization and financial autonomy.

Trump Administration’s Crypto-Friendly Stance

Since assuming office in January, the Trump administration has taken a proactive stance toward digital assets. With Republicans controlling both the Senate and House of Representatives, several crypto-friendly legislative proposals have emerged. Trump has already signed multiple executive orders aimed at supporting the industry and reducing regulatory burdens.

The push to rescind the IRS DeFi broker rule represents a broader shift in regulatory approach under the current administration. By supporting resolutions to overturn restrictive measures, the White House signals its willingness to work with the crypto sector to create policies that promote growth while addressing concerns around compliance and oversight.

While the fate of the IRS rule now lies with Congress, industry leaders remain optimistic that the Trump administration’s support will lead to a more favorable regulatory environment.

Trump to Host Crypto Summit with Industry Leaders at White House

In related news, the White House is set to host a highly anticipated crypto summit, bringing together some of the most influential figures in the digital asset industry. President Donald Trump will personally address the gathering, which will include top executives from leading crypto firms such as Coinbase, Kraken, Chainlink, and Paradigm. The summit shows the administration’s growing commitment to making the United States a global leader in the cryptocurrency space.

Among the high-profile attendees confirmed for the event are Coinbase CEO Brian Armstrong, Kraken co-CEO Arjun Sethi, and Chainlink co-founder Sergey Nazarov. A spokesperson for Chainlink verified Nazarov’s attendance, while representatives from Coinbase and Kraken also confirmed Armstrong and Sethi’s participation.

In addition, Strategy founder Michael Saylor, Exodus CEO JP Richardson, and Paradigm co-founder Matt Huang are slated to attend, according to announcements made on X on Tuesday.

“I look forward to discussing how America can take a leadership role in promoting the principles of open crypto and enabling builders in ecosystems such as Bitcoin, Ethereum, and Solana,” Huang stated.

The summit, chaired by AI and Crypto Czar David Sacks, will be directed by Bo Hines, who leads Trump’s working group on digital assets. The event is scheduled to begin at 1:30 p.m. ET, according to sources familiar with the matter.

The Trump administration’s recent pro-crypto stance marks a significant shift from previous regulatory approaches. Over the past few weeks, the president has made several statements indicating that his administration aims to position the US as the “crypto capital.”

One key topic expected to be discussed at the summit is Trump’s proposed Crypto Strategic Reserve, a working group initiative designed to establish a digital asset reserve comprising “US-based coins.” This would include Bitcoin, Ethereum, and select altcoins such as Solana, Cardano, and XRP. While Trump’s proposal has been met with enthusiasm in some circles, critics have questioned the inclusion of certain altcoins, arguing that Bitcoin and Ethereum maintain higher decentralization and developer activity.

Regulatory Changes and the SEC’s Retreat

The timing of the summit coincides with sweeping changes at the US Securities and Exchange Commission (SEC). Since former SEC Chair Gary Gensler’s departure in January, the regulatory landscape has shifted notably. The agency has dropped lawsuits against several major crypto firms, including Kraken, Consensys, and Coinbase, and has ended probes into companies such as Gemini and Yuga Labs.

On Tuesday, market maker Cumberland DRW confirmed that the SEC had agreed to dismiss its lawsuit against the firm, marking yet another significant legal victory for the crypto industry. These developments suggest a regulatory thawing, which could pave the way for greater institutional adoption and innovation in the sector.

The White House’s move to host a crypto summit is widely seen as an attempt to align US policy with the interests of blockchain innovators and investors. In a statement on Saturday, the administration emphasized its commitment to fostering a more welcoming regulatory environment for digital assets.

“After the previous administration unfairly prosecuted the digital asset space, President Trump’s policy vision represents a new era for digital financial technology,” the statement read.

With major industry leaders gathering in Washington, the crypto community is watching closely to see whether this summit will lay the foundation for new policies that could solidify the US’s role as a global crypto hub.