Trump Scraps IRS Rule Targeting DeFi Platforms, Reinforces Pro-Crypto Stand
Unlike traditional exchanges that act as intermediaries, DeFi platforms allow peer-to-peer transactions on blockchain networks.
US President Donald Trump has signed legislation overturning a controversial IRS rule that extended tax-reporting requirements to decentralised finance (DeFi) platforms. The move, long demanded by industry insiders, reflects Trump’s ongoing push to position himself as the most crypto-friendly president in US history.
IRS Rule Faced Industry Backlash
The now-nullified IRS rule was finalised in the final days of the Biden administration and aimed to bring DeFi platforms under the same tax-reporting umbrella as centralised exchanges like Coinbase and Kraken. The rule classified these decentralised platforms as "brokers," a definition that many in the crypto space said was fundamentally flawed.
Unlike traditional exchanges that act as intermediaries, DeFi platforms allow peer-to-peer transactions on blockchain networks. Because these platforms don’t directly manage user identities or transactions in the way centralised services do, critics argued that expecting them to meet IRS reporting standards was unrealistic.
Crypto advocates argued that the IRS’s demand for DeFi platforms to submit user data was technically impossible and legally overreaching. They called on lawmakers, especially Republicans, to step in. Congress responded swiftly — both the House and the Senate voted in March to nullify the regulation using the Congressional Review Act.
Trump’s Early Moves Signal Strong Crypto Focus
Since returning to the White House, Trump has wasted no time making his crypto ambitions clear. “On the campaign trail, he pledged to be a ‘crypto president’ and courted cash from the industry by promising to promote the adoption of digital assets.”
Just days into his new term, Trump created a cryptocurrency working group tasked with drafting fresh digital asset regulations. And in a bold March executive order, he directed the creation of a federal bitcoin stockpile — a move that stunned traditional financial observers and thrilled crypto enthusiasts.
A Political Win, A Regulatory Reset
The IRS rule had stemmed from the $1 trillion Infrastructure Investment and Jobs Act of 2021, which sought to tighten tax enforcement around digital assets. It required brokers to send tax forms both to the IRS and to users. While intended to close tax loopholes, the expanded definition of “broker” sparked fierce debate about its scope and practicality in the decentralised ecosystem.
Trump’s decision to sign the rollback into law marks a clear divergence from the previous administration’s regulatory tone — and a signal to crypto investors that the current White House is serious about scaling back what many see as regulatory overreach.
The White House confirmed the move in a statement, capping off what’s being hailed in crypto circles as a regulatory victory. Whether this opens the door to a broader reshaping of federal crypto policy remains to be seen, but one thing is clear: Trump is betting big on blockchain.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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