Crypto Market News: Trump Strikes Down IRS DeFi Rule

U.S. President Donald Trump has signed the first-ever cryptocurrency-focused bill into law, marking a huge legislative win for the digital asset industry. Investors are calling it a groundbreaking move. 

Introduced by Rep. Mike Carey (R-Ohio) and Sen. Ted Cruz (R-Texas), the bill repeals a controversial IRS rule that had extended the definition of a “broker” to include DeFi platforms and other non-custodial crypto services.

This decision is celebrated as a turning point for the industry, which has long felt burdened by unclear and overreaching regulations.

What Was the IRS Rule About?

The now-repealed rule, finalized at the end of 2024, would have forced decentralized finance (DeFi) platforms, wallet providers, and even front-end interfaces of blockchain protocols to gather user information and report transactions to the IRS using Form 1099.

Critics argued that the rule made little sense for platforms that don’t hold customer funds. Instead, it posed unnecessary challenges for innovation and risked overloading the IRS with a mountain of compliance data it isn’t prepared to handle.

Congressman Carey: “This Rule Hinders Innovation”

Rep. Mike Carey strongly opposed the rule, calling it “misguided” and harmful to American tech innovation. In a public statement, he explained that the IRS should focus on its existing responsibilities to taxpayers, not chase new regulatory powers that create confusion.

He also noted this isn’t just another bill, it’s the first tax-related Congressional Review Act of Disapproval ever signed into law, making it a milestone for crypto and tax legislation.

The Bill’s Journey Through Congress

Known officially as H.J. Res.25, the resolution saw solid support in both chambers. It passed the Senate on March 4, 2025, and the House on March 11. Because of its connection to federal budgeting, the bill required one more vote in the Senate, which happened on March 26. After that, it landed on the president’s desk and was signed into law.

The White House had already signaled approval, describing the IRS rule as a “midnight regulation” rushed in during the final days of the Biden administration.

A Shift in the Crypto Regulatory Landscape

This legislative triumph is not taking place in isolation. The broader Washington context is changing the crypto industry. The SEC, under interim chair Mark Uyeda, has recently dropped cases against major crypto players like Coinbase, Gemini, and Kraken.

As a companion action, the Department of Justice shut down its National Cryptocurrency Enforcement Team on April 8, admitting that it had made strategic errors.

And in another big shift, Paul Atkins, a long-time SEC commissioner known for supporting crypto innovation, is set to become the new SEC chair. With Atkins at the helm, many in the industry are hoping for a more balanced, innovation-friendly approach from regulators.

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