At least for now, the crypto industry just scored a major win with this new update related to IRS crypto reporting. On April 10, 2025, President Donald Trump signed off on a bill that officially killed an IRS rule requiring decentralized finance (DeFi) platforms to report user transaction data to the government. This rule, finalized late last year under the Biden administration, had expanded the definition of a “broker” to include traditional crypto exchanges and DeFi protocols, even those that run on smart contracts without a single employee.
The rule originally stemmed from the 2021 Infrastructure Investment and Jobs Act, which aimed to crack down on crypto tax evasion. Lawmakers figured the IRS should know if you’re making gains in DeFi. But the problem? DeFi protocols don’t work like centralized exchanges. They don’t have KYC forms or customer service desks. There’s no easy way for them to report user data, even if they wanted to.
Legislative Response and Repeal To Trump Tax Shake-Up
Fast forward to 2025, and the backlash hit a boiling point. Industry leaders, developers, and lawmakers alike called the rule unworkable. Enter the Congressional Review Act, a rarely used tool that lets Congress reverse newly finalized regulations with a simple majority vote.
🚨🇺🇸 TRUMP TO SIGN FIRST-EVER CRYPTO BILL—DEFI BROKER RULE IS DEAD
The Senate just crushed the IRS's DeFi surveillance rule 70-28 after the House already demolished it 292-132, handing crypto developers a massive win against government overreach.
Critics celebrated the death of… https://t.co/6crwWO0ocq pic.twitter.com/tRvlJglhkJ
— Mario Nawfal (@MarioNawfal) April 11, 2025
Republicansled the charge, with Rep. Mike Carey (R-Ohio) and Sen. Ted Cruz (R-Texas) at the forefront. Their argument? The rule was overly broad, poorly thought out, and risked crushing innovation in a sector the U.S. should be leading—not regulating into oblivion.
The bill breezed through both chambers of Congress and landed on Trump’s desk, where he wasted no time signing it. The move marks the first piece of crypto-related legislation enacted during his second term.
What Do Trump Tax Changes Mean For the Crypto Industry?
Naturally, the crypto world is breathing a little easier. For DeFi developers, this means they won’t be expected to do the impossible, like reporting on users they don’t control or even know. The repeal removes a major regulatory headache and signals that the government might finally be trying to understand how decentralized systems actually function.
That said, it’s not all champagne and memes. Some experts worry the repeal leaves a gaping hole in tax enforcement. Without clear reporting, the IRS will have a tougher time tracking gains from DeFi activity. And while that might sound like a win for privacy advocates, it raises long-term questions about whether the space can grow sustainably without accountability.
IRS Crypto Reporting in 2025 and Beyond?
This isn’t happening in isolation. The Trump administration has been moving fast on crypto policy. In just a few short months, Trump has signed an executive order to create a national Bitcoin reserve and launched a working group focused on rewriting the federal approach to digital assets.
The message is clear: this White House wants a hands-off, pro-innovation stance on crypto. However, whether that leads to smarter regulation or just less remains to be seen.
In the meantime, DeFi gets to keep building. The question is: can the space self-regulate before another wave of rules comes crashing back?
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Key Takeaways
- President Trump repealed the IRS rule that forced DeFi platforms to report user transactions, scrapping a major Biden-era regulation.
- The original rule labeled DeFi protocols as “brokers,” despite their lack of centralized control or user data.
- Crypto industry leaders and lawmakers called the rule unworkable, leading to its repeal via the Congressional Review Act.
- The move signals a shift toward pro-innovation crypto policy under Trump’s second term.
- While developers celebrate, some experts warn the repeal weakens tax enforcement and leaves a regulatory gap.
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