On April 10, 2025, President Donald Trump enacted a pivotal resolution overturning a contentious IRS rule targeting Decentralized Finance (DeFi) platforms, a significant triumph for the cryptocurrency community. This move nullifies a regulation from late 2024 under the Biden administration that deemed most DeFi projects “brokers” and imposed tough tax reporting requirements. Backed by bipartisan support in Congress, this repeal highlights a shift toward promoting crypto innovation over rigid control. This article covers the repeal’s background, its details, and its potential impact on the crypto market in 2025.
What Was the IRS Rule?
Launched in December 2024, the IRS rule demanded that DeFi platforms—including lending protocols and decentralized exchanges—track and report detailed user transactions, akin to traditional brokers. This involved issuing Form 1099s for crypto trading income, a requirement critics called “unrealistic” due to DeFi’s decentralized nature. Unlike centralized exchanges like Binance or Coinbase, DeFi protocols rely on smart contracts on blockchains like Ethereum, with no central authority to enforce compliance. The rule risked hampering innovation, pushing projects offshore, and burdening developers excessively.
The reaction was swift. Industry leaders and groups like the DeFi Education Fund argued it clashed with blockchain technology’s core values—privacy and autonomy. X posts celebrated the repeal as a “big win for crypto freedom.” The process began with a U.S. House resolution in March 2025, followed by a 70-28 Senate vote, showing rare bipartisan agreement against overregulation.
Trump’s Pro-Crypto Commitment
A vocal crypto advocate since his 2024 campaign, President Trump quickly signed the repeal. This move reinforced his administration’s focus on easing restrictions on digital assets. Previous efforts, like creating a Bitcoin reserve and appointing pro-crypto Paul Atkins as SEC Chairman, reflect this stance. David Sacks, White House Crypto and AI Advisor, noted Trump’s goal to “remove stifling rules,” aligning with his vision of the U.S. as a crypto leader. This repeal counters the Biden-era “midnight regulation,” seen as a last-ditch effort to curb DeFi innovation.
Impact on DeFi and Crypto
The repeal relieves DeFi of oppressive reporting demands, fostering growth as crypto markets thrive—Bitcoin hit $109,000 in January 2025 (Investopedia). It suggests a lighter regulatory approach under Trump, potentially aiding altcoins like Ethereum and Solana, key to DeFi ecosystems. Some Democrats, however, warn of tax evasion risks, a debate likely to continue.
Conclusion
Trump’s repeal of the IRS DeFi rule on April 10, 2025, is a turning point for cryptocurrency in the U.S. By scrapping an impractical rule, it paves the way for DeFi to flourish, bolstering America’s blockchain standing. For crypto enthusiasts, it’s a cue to innovate—stay tuned as this pro-crypto era begins!