Trump Repeals IRS DeFi Rule—A Landmark Win for Crypto in 2025

President Trump has officially repealed the IRS DeFi Broker Rule—a major win for the US crypto industry.

Signed into law via H.J.Res.25, this is the first time a crypto tax law has been reversed in the US. The bill was sponsored by Rep. Mike Carey (R-Ohio) and Sen. Ted Cruz (R-Texas) and had rare bipartisan support in Congress before landing on Trump’s desk in April 2025.

What Was the DeFi Broker Rule—and Why It Was So Bad

Finalized in late 2024, the original IRS rule broadened the definition of a “broker” to include DeFi platforms, front-end interfaces and even non-custodial wallet developers. That meant many crypto developers and projects would have to collect and report user data—including names, transaction history and wallet addresses—on IRS Form 1099.

The backlash was swift and widespread. Critics across the crypto industry and in Congress argued that the rule was:

• A privacy risk: DeFi protocols don’t have centralised operators so collecting user data was seen as impossible or invasive.

• An innovation blocker: Developers said it would drive crypto startups offshore and stall US blockchain development.

• Unworkable in practice: The IRS was seen as unable to process such complex technical information.

Rep. Carey called the repeal a “historic victory” and said the IRS rule “would have strangled innovation and overwhelmed a system that wasn’t ready for it”.

A Clear Shift Towards Crypto Friendly Policies in Washington

The repeal is more than just a win for DeFi—it’s the latest in a series of policy changes that show a broader pro-crypto trend in Washington.

This week the Department of Justice shut down its National Cryptocurrency Enforcement Team citing operational misalignment and limited prosecutorial impact.

Meanwhile the SEC under Acting Chair Mark Uyeda has already dropped several high profile lawsuits against major crypto firms like Coinbase, Gemini and Kraken. And soon Paul Atkins, a former SEC commissioner who is crypto friendly, will take over the top spot at the agency.

Together these moves suggest the Trump administration is going all in on an innovation driven approach to digital asset regulation—one that prioritises entrepreneurship over enforcement.

Why This Matters for the Future of Crypto in the US

This is a big win: the US government under current leadership is pro-blockchain not anti-blockchain.

With regulatory pressure off and legal clarity coming into focus this could mean crypto devs can build in the US again, institutional investment can flow and America can become the hub for Web3.