President Donald Trump has signed a resolution revoking the controversial IRS rule targeting decentralized finance (DeFi) platforms. The move, finalized on April 10, 2025, eliminates rigid reporting requirements that many in the crypto sector deemed overly burdensome and innovation-stifling.

What Was the IRS DeFi Rule?

The now-repealed rule, introduced during the final days of the Biden administration, expanded the definition of "broker" to include DeFi platforms and other non-custodial entities. This required these platforms to report gross proceeds from crypto transactions and collect user data, including identities and transaction histories. Critics argued that this was impractical for decentralized protocols governed by smart contracts rather than centralized intermediaries.

Key Details of the Resolution

The resolution, H.J.Res.25, was introduced by Rep. Mike Carey and Sen. Ted Cruz in December 2024. It passed both chambers of Congress before reaching President Trump’s desk. By invoking the Congressional Review Act, lawmakers ensured that the IRS cannot issue a similar rule without new congressional authorization.

With Trump’s signature, the rule is officially voided, relieving DeFi platforms of compliance obligations that many industry leaders said were impossible to meet. The decision is seen as a major victory for privacy advocates and innovators in the digital asset space.

Key Implications for the Crypto Industry

1. Reduced Compliance Burden: DeFi platforms are no longer required to act as brokers or collect sensitive user data, fostering a more innovation-friendly environment.

2. Privacy Protection: The repeal addresses concerns about taxpayer privacy by eliminating requirements for platforms to share user information with the IRS.

3. Boost to U.S. Crypto Competitiveness: The move aligns with Trump’s pro-crypto stance, positioning the U.S. as a more favorable jurisdiction for blockchain innovation.

4. Legislative Milestone: This is the first successful pro-crypto legislation to clear Congress and be signed into law by a U.S. president, signaling growing acceptance of digital assets among policymakers.

The repeal is part of a broader push by Congress to create a more balanced regulatory framework for cryptocurrencies. Lawmakers are now turning their attention to stablecoin regulation and market protocols for crypto transactions, with President Trump urging Congress to deliver a unified bill by August 2025.

The cryptocurrency community has widely celebrated the repeal as a step forward for decentralized finance in the U.S. The Blockchain Association and other advocacy groups praised the decision, emphasizing its potential to attract more innovation and investment into the country’s crypto ecosystem. However, some critics warn that reduced oversight could lead to increased tax evasion and fraud within the DeFi space. Policymakers will need to strike a balance between fostering innovation and ensuring adequate investor protections.