President Donald Trump has signed a new legislation that repeals a controversial crypto tax rule introduced at the tail end of the Biden administration. Finalized in December 2024 by the Internal Revenue Service (IRS), the rule broadened the definition of “broker” to also cover decentralized finance (DeFi) platforms and other facilitators of digital assets. Its repeal is a huge victory for crypto advocates and suggests a new approach to how the U.S. government plans to address digital asset oversight. Trump signs first-ever crypto law after Congress overturns IRS rule targeting DeFi platforms The now-defunct rule would have required digital asset brokers—including decentralized platforms—to collect customer information and report it to the IRS, a move that sparked widespread concern across the crypto industry. Senator Ted Cruz of Texas and Representative Mike Carey of Ohio, both Republican lawmakers, spearheaded the repeal. The pair filed a joint resolution earlier this year to overturn the rule, which they said was overly broad and bad for innovation in the crypto sector. The Senate voted 70-28 in broad bipartisan support for the resolution in March 2025. The House followed suit, approving it on its own. Because of procedural controls, the measure had to return to the Senate for final approval before being sent to President Trump’s desk. Representative Carey attended the signing ceremony and said the law marked a historic milestone. He stated it was the first crypto bill in American history to be lawfully signed. Carey added that by rescinding the law, President Trump and Congress restored the IRS to its basic functions rather than burdening it with regulating emerging technologies. Critics of the IRS rule argued that it unfairly classified decentralized platforms, which do not keep customer records like traditional brokers, as if they were centralized financial institutions. The rule, they said, would have required developers and software builders to comply with tax reporting obligations they were technically unable to fulfill. Crypto industry celebrates major victory with repeal of controversial IRS rule Crypto leaders and industry stakeholders celebrated the repeal as long overdue relief. Amanda Tuminelli, Executive Director of the DeFi Education Fund, said that Congress and the President support innovators. She noted that President Trump’s signature marked a key paradigm shift for the crypto industry, indicating that the United States was now adopting a smart, future-oriented approach to digital assets. The IRS rule specifically focused on centralized crypto exchanges and “front-end service providers,” or platforms that give users access to DeFi protocols via user-friendly front-ends. Critics maintained that requiring these platforms to collect and report user data would fundamentally transform the open-source and decentralized structure of the Internet. Even beyond technical obstacles, privacy advocates said such reporting would raise civil liberties concerns, putting average users at risk of being over-monitored. Repealing the rule was a victory for innovation and privacy, as it will promote the ongoing development of open, permissionless technologies. It also frees many in the DeFi ecosystem from the risk of enforcement actions for refusing to comply with rules they believed were unworkable. Trump drives forward pro-crypto agenda The repeal is consistent with President Trump’s broader crypto strategy. After returning to the White House, Trump has sought to present himself as a pro-crypto global leader, keen on making the U.S. the global center of digital asset innovation. Trump established a federal cryptocurrency task force during his first week in office to devise new policies focused on digital assets. In March 2025, he signed an executive order mandating the federal government to develop a strategic Bitcoin reserve so the U.S. could stockpile “the digital gold of the future.” The White House had called the IRS rule a “midnight regulation,” pushed through in the final days of the Biden administration without adequate public comment. Trump’s team said it ignored the realities of decentralized technology and could drive innovation overseas. Now that the rule has been formally repealed, the administration should propose a new regulatory regime that will give balanced consideration to innovation, tax compliance, and national security. The industry expects a more nuanced approach, differentiating between centralized custodians and decentralized, protocol-based platforms. Trump’s White House has a message, and it is clear: America is open to the crypto business. With the dust settling, eyes turn toward the next chapter of crypto regulations in the United States – a chapter many hope will drive innovation and safeguard privacy while delivering fair, transparent rules to all. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
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