On April 10, 2025, President Donald Trump signed a landmark resolution overturning a contentious IRS rule targeting Decentralized Finance (DeFi) platforms, marking a significant victory for the cryptocurrency community. This decision scraps a regulation introduced in late 2024 under the Biden administration, which classified most DeFi projects as “brokers” and imposed stringent tax reporting requirements. With bipartisan support from Congress, this repeal reflects a shift toward fostering crypto innovation over restrictive oversight. This article examines the repeal, its background, and its implications for the crypto market in 2025.
The Controversial IRS Rule Explained
The IRS rule, enacted in December 2024, mandated that DeFi platforms—ranging from lending protocols to decentralized exchanges—collect and report detailed user transaction data, similar to traditional financial brokers. This included issuing Form 1099s for income from crypto trades, a move critics labeled “unworkable” due to DeFi’s decentralized nature. Unlike centralized exchanges like Binance or Coinbase, DeFi protocols operate via smart contracts on blockchains like Ethereum, lacking a central authority to enforce compliance. The rule threatened to stifle innovation, push projects offshore, and burden developers with unfeasible obligations.
The backlash was swift. Industry leaders, alongside groups like the DeFi Education Fund, argued it undermined the essence of blockchain technology—privacy and autonomy. Posts on X echoed this sentiment, with users hailing the repeal as a “massive win for crypto freedom.” The rule’s demise began when the U.S. House passed a resolution in March 2025, followed by a 70-28 Senate vote, showcasing rare bipartisan unity against overregulation.
Trump’s Pro-Crypto Stance Shines
President Trump, a vocal crypto advocate since his 2024 campaign, wasted no time signing the resolution into law. His administration has prioritized dismantling barriers to digital asset growth, evidenced by earlier moves like establishing a Bitcoin reserve and appointing pro-crypto figures like Paul Atkins as SEC Chairman. David Sacks, White House Crypto and AI Advisor, confirmed Trump’s intent to “end burdensome regulations,” aligning with his pledge to make the U.S. a crypto superpower. This repeal is seen as a direct rebuke to the Biden-era “midnight regulation,” which critics claimed choked DeFi innovation.
Implications for DeFi and Beyond
The repeal lifts a significant weight off the DeFi sector. Developers and users no longer face the risk of invasive reporting. This shift could encourage adoption as crypto markets grow—Bitcoin reached $109,000 in January 2025, according to Investopedia. It also reflects a broader regulatory shift under Trump. His administration favors a hands-off approach, which could benefit altcoins like Ethereum and Solana. These assets play key roles in DeFi ecosystems. However, some Democrats warn it may create tax loopholes, a debate likely to persist.
Conclusion
Trump’s signing of the IRS DeFi rule repeal on April 10, 2025, is a defining moment for cryptocurrency in the U.S. By axing a regulation deemed impractical, it paves the way for DeFi to flourish, reinforcing America’s position in the blockchain race. For crypto enthusiasts, it’s a green light to innovate—stay engaged as this pro-crypto era unfolds!
