Trump Kills IRS DeFi Broker Rule, Shuts Down Biden-Era Crypto Tax Plan

YEREVAN (CoinChapter.com) — On April 11, U.S. President Donald Trump signed a law that repeals the IRS DeFi Broker Rule, a regulation created under the Biden administration. The rule was finalized in late 2024 and was set to take effect in 2026. It required decentralized finance platforms to report user transactions to the IRS.

The IRS DeFi Broker Rule expanded the definition of a crypto broker to include decentralized platforms. The aim was to close tax reporting gaps in the crypto sector. The Treasury Department estimated billions in unreported taxes from digital asset sales each year.

The rule was overturned before it took effect. Lawmakers used the Congressional Review Act (CRA) to reverse the IRS DeFi Broker Rule. The CRA is a legal tool that allows Congress to cancel recent federal regulations. It gives lawmakers up to 60 legislative days to review and reject rules issued by government agencies.

To use the CRA, both the House of Representatives and the Senate must pass a joint resolution of disapproval with a simple majority. Once both chambers approve the resolution, it goes to the president for a signature. In this case, both chambers passed the resolution in March 2025. That action formally ended the IRS DeFi Broker Rule before it could be enforced in 2026.

Crypto Industry Challenged the IRS DeFi Broker Rule

The IRS DeFi Broker Rule faced strong resistance from the crypto sector. DeFi platforms said they could not comply because they don’t collect user data. These platforms operate without intermediaries, unlike centralized exchanges such as Coinbase or Kraken.

The rule required software protocols to report customer transactions. Developers said that was technically impossible and legally unclear. Many warned that the IRS DeFi Broker Rule would put unworkable pressure on decentralized systems and force projects out of the U.S.

In response, the IRS broadened the broker definition in 2024 to include DeFi platforms. The move led to lobbying efforts from industry players. They said the IRS DeFi Broker Rule ignored how decentralized protocols actually function.

In March 2025, both the House and the Senate voted to repeal the IRS DeFi Broker Rule. The Joint Committee on Taxation reported that removing the rule would cost the government $4 billion in tax revenue over ten years.

Despite the projected loss, lawmakers moved forward. Rep. Mike Carey said the rule “hindered American innovation” and would have overwhelmed the IRS during tax season. He also raised privacy concerns.

Jason Smith, chairman of the House Ways and Means Committee, said Trump’s signature reaffirmed Congress’s role in setting tax policy. The repeal of the IRS DeFi Broker Rule became law immediately after Trump signed the resolution.

Trump Takes Pro-Crypto Position With DeFi Rule Repeal

Trump’s decision to cancel the IRS DeFi Broker Rule aligned him with the crypto industry. After taking office, his administration created a federal working group to review crypto regulation. It also introduced a Bitcoin reserve strategy for the United States.

The IRS DeFi Broker Rule had been part of a broader tax enforcement campaign by the Biden administration. The regulation was meant to bring DeFi under the same rules as centralized exchanges.

However, DeFi tools operate on permissionless software, without user onboarding or identity checks. Industry groups said the IRS DeFi Broker Rule applied rules that could not be followed in practice.

The IRS DeFi Broker Rule was scheduled to begin in 2026, but now it will not be enforced. The regulation would have made it mandatory for DeFi platforms to track and report user trades to the IRS.

Developers said most DeFi tools are just code and do not store user data. They argued the rule would require major changes to decentralized systems that rely on privacy and open access. Additionally, with the IRS DeFi Broker Rule repealed, the government will need new ways to monitor crypto taxes from decentralized platforms. For now, the reporting rules for DeFi remain unchanged.