President Donald Trump has signed legislation nullifying an Internal Revenue Service (IRS) rule that sought to expand tax reporting requirements for cryptocurrency brokers, including decentralized finance (DeFi) platforms.
The move, which came after bipartisan congressional support, was welcomed by the crypto industry, which had strongly opposed the regulation.
The IRS rule, finalized in late 2024 under the Biden administration, aimed to clarify tax reporting obligations for digital asset brokers. It was scheduled to take effect in 2026 and was designed to ensure compliance by requiring brokers to report gross sales of digital assets to the IRS and account holders. However, DeFi platforms argued that, unlike traditional exchanges such as Coinbase and Kraken, they do not act as intermediaries and lack the ability to track user transactions.
The rule was initially introduced as part of the 2021 Infrastructure Investment and Jobs Act to address tax gaps in cryptocurrency transactions. Estimates suggested that repealing the rule could lead to nearly $4 billion in unpaid taxes over the next decade.
Despite these concerns, the cryptocurrency industry pushed back, calling the regulation unworkable for DeFi platforms. Lawmakers used the Congressional Review Act—a mechanism allowing Congress to reverse federal regulations within a specific timeframe—to nullify the rule, with the bill receiving bipartisan support in both the House and Senate in March.
Trump, who has increasingly positioned himself as a supporter of digital assets, has vowed to promote the crypto industry by reducing regulatory hurdles. His administration has also taken steps toward developing a federal digital asset policy, including the creation of a cryptocurrency working group and an executive order establishing a US Bitcoin reserve.
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