Trump Signs Bill to Nullify Expanded IRS Crypto Broker Rule

• Trump signs bill repealing IRS crypto broker rule, a win for DeFi.

• New law prevents future IRS crypto rules without Congressional approval.

President Donald Trump has officially signed a bill into law that cancels a controversial IRS rule affecting the cryptocurrency industry. Digital asset supporters consider this development a major victory because it benefits users of decentralized finance platforms, known as DeFi.

Trump Signs Bill to Block IRS DeFi Tax Regulation

The IRS devised a rule that intended to redefine what constitutes a broker by encompassing decentralized crypto exchanges into the definition. People can conduct direct transactions with other customers via blockchain-powered platforms that operate without traditional mediators. These platforms would need to submit user tax data, including digital asset sales amounts, to the Internal Revenue Service according to the established rule.

Although the rule was set to take effect in 2026, it sparked strong criticism even before its implementation. The cryptocurrency industry strongly criticized this DeFi-related rule because they considered it excessively broad and practically impossible to execute. Due to their nature, DeFi systems lack the capabilities to obtain personal data from users and maintain access to funds, so they cannot comply with reporting obligations.

The IRS finalized the updated rule exactly when the Biden administration was set to end in December 2024. According to the new tax guidelines, DeFi platforms come within their scope of legislation. The public announcement of taxes on DeFi systems triggered quick opposition from cryptocurrency developers, together with investors and privacy advocates, because they worried about both technological advancement and personal freedom.

Congress stepped in because of these developments. The House of Representatives and Senate passed a Congressional Review Act-approved bill to repeal the IRS rule in March 2025. Congress possesses the power through the Congressional Review Act to abolish recently implemented federal rules by passing legislation with minimal parliamentary approval. After House and Senate lawmakers approved the repeal of the bill, it was forwarded to President Trump for his signature.

New Law Bans IRS from Targeting DeFi Without Congress

On April 11, 2025, President Trump formally signed the passed bill into law. Through his signature, President Trump officially blocked the updated broker rule by the IRS, and he also declared its permanent exemption from reinstatement without Congressional approval of a new rule.

Supporters of the decision praised it as a victory for freedom, innovation, and privacy. Representative Mike Carey argued in favor of the bill because the proposed requirement would create an excessive amount of paperwork, which could have overwhelmed the IRS during tax filing time. His prediction suggested the regulation would undermine America’s position as a leader in blockchain technology and crypto research.

Moreover, Carey emphasized that the IRS should focus on its existing responsibilities instead of creating new, burdensome rules. The Congressman also thanked President Trump for his defense of the industry, together with praising Crypto Czar Sacks for his groundwork on this legislation.

The Infrastructure Investment and Jobs Act from 2021 was the source of this rule’s origin. The legislation ordered IRS personnel, together with members of the Treasury Department, to create protocols for digital asset disclosure. The IRS exceeded its authorized scope of duty, according to critics who assessed their work. Under the updated rule, administrators added self-custodial wallets together with noncustodial software developers who do not directly manage user data to their regulatory scope.

Through his signature, President Trump established support for digital assets and created a positive precedent in the digital asset industry. This new legislation forbids any future administration from reinstating comparable IRS reporting rules without completing full legislative procedures.

Ultimately, this decision shifts US government policy toward cryptocurrency regulation into a new direction. The new legislation safeguards innovation along with decentralized infrastructure and defends user information privacy.