Trump signs resolution killing IRS DeFi broker rule

Update April 11, 1:46 am: This article has been updated to include more information and background on the resolution.

US President Donald Trump has signed a joint congressional resolution overturning a Biden administration-era rule that would have required decentralized finance (DeFi) protocols to report transactions to the Internal Revenue Service.

Set to take effect in 2027, the so-called IRS DeFi broker rule would have expanded the tax authority’s existing reporting requirements to include DeFi platforms, requiring them to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.

Trump formally killed the measure by signing off the resolution on April 10, marking the first time a crypto bill has ever been signed into law, Representative Mike Carey, who backed the bill, said in a statement.

“The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season,” he said.

Source: Mike Carey

Critics of the rule claimed it would lump decentralized platforms with too onerous rules, hampering innovation in crypto and DeFi.

Supporters, such as Democratic Representative Lloyd Doggett, said in March that killing the IRS rule would create a loophole that wealthy tax cheats would exploit.

The resolution to kill the rule quickly made its way through Congress and passed out of the House Ways and Means Committee on Feb. 25, with the House passing it on March 11.

The Senate passed the resolution on March 26. It had previously passed its own version of the resolution in early March, but the House made its own due to Constitutional rules about where budget measures should originate.

Trump was widely expected to sign the bill, as White House AI and crypto czar David Sacks said in March that the president supported killing the measure

Crypto advocacy group Blockchain Association CEO Kristin Smith said in an April 10 statement the “industry’s innovators, builders, and developers can breathe again,” now the resolution has passed. 

“This rule promised an end to the United States crypto industry; it was a sledgehammer to the engine of American innovation,” she added.

Kristin Smith claimed the IRS rule would have destroyed the US crypto industry. Source: Blockchain Association

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The lobby group filed a lawsuit in December against the IRS, the Treasury and then-Treasury Secretary Janet Yellen to repeal the IRS rule, claiming it was unlawful and an “unconstitutional overreach.

The Trump administration has taken a friendly attitude toward crypto and has worked to heel the Securities and Exchange Commission, which has wound back its hardline stance toward crypto forged under former Chair Gary Gensler.

The regulator has dismissed a number of enforcement actions and probes against crypto firms that it launched under the Biden administration and has begun a series of industry consultations on how it should regulate crypto.

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