On April 10, 2025, President Donald Trump signed a historic resolution nullifying a divisive IRS rule aimed at Decentralized Finance (DeFi) platforms, delivering a major win for the cryptocurrency community. This action overturns a regulation from late 2024 under the Biden administration that labeled most DeFi projects as “brokers” and enforced strict tax reporting duties. Backed by bipartisan Congressional support, this repeal signals a move toward nurturing crypto innovation rather than imposing heavy-handed oversight. This article explores the repeal’s origins, its context, and its potential effects on the crypto market in 2025.
Understanding the Scrapped IRS Rule
Introduced in December 2024, the IRS rule required DeFi platforms—such as lending systems and decentralized exchanges—to gather and report extensive user transaction data, mirroring obligations of traditional financial brokers. This meant issuing Form 1099s for crypto trading income, a requirement critics deemed “impractical” given DeFi’s decentralized structure. Unlike centralized exchanges like Binance or Coinbase, DeFi protocols run on smart contracts atop blockchains like Ethereum, with no central entity to enforce such rules. The regulation risked stifling creativity, driving projects overseas, and overwhelming developers with unmanageable demands.
The response was immediate and fierce. Industry advocates, including the DeFi Education Fund, contended it eroded blockchain technology’s core principles—privacy and independence. X posts amplified this view, with users celebrating the repeal as a “huge victory for crypto liberty.” The rule’s end kicked off with a U.S. House resolution in March 2025, followed by a 70-28 Senate vote, reflecting rare cross-party agreement against excessive regulation.
Trump’s Crypto-Friendly Leadership
A staunch crypto supporter since his 2024 campaign, President Trump acted swiftly to enact the repeal. His administration has focused on removing barriers to digital asset growth. This is evident in actions like creating a Bitcoin reserve and appointing pro-crypto figures such as Paul Atkins as SEC Chairman. David Sacks, White House Crypto and AI Advisor, highlighted Trump’s commitment to “eliminate oppressive regulations.” This echoes his goal to establish the U.S. as a crypto superpower. This repeal directly challenges the Biden-era “midnight rule,” which many argued choked DeFi innovation with its late-hour imposition.
Trump’s pro-crypto stance has been a cornerstone of his policy vision. By dismantling this rule, he reinforces a narrative of empowerment for the crypto industry, aligning with a growing public and political appetite for digital currencies. The bipartisan backing further highlights a shifting tide, prioritizing technological progress over bureaucratic constraints.
What This Means for DeFi and the Crypto Landscape
The repeal lifts a heavy burden from the DeFi sector. Developers and users are now free from the threat of invasive tax reporting, potentially spurring greater adoption as crypto markets expand—Bitcoin hit $109,000 in January 2025 (Investopedia). This reflects a larger regulatory pivot under Trump, favoring a lighter touch that could uplift altcoins like Ethereum and Solana, vital to DeFi ecosystems. However, some Democrats caution it might open tax evasion gaps, a contention likely to fuel ongoing debates.
For the broader cryptocurrency market, this move could encourage innovation and investment, reinforcing the U.S.’s role in the global blockchain race. It’s a signal that the government is rethinking its approach, aiming to balance freedom with fiscal responsibility.
Conclusion
President Trump’s signing of the IRS DeFi rule repeal on April 10, 2025, is a landmark for cryptocurrency in the U.S. By scrapping an unworkable regulation, it clears the path for DeFi to thrive, strengthening America’s stance in the blockchain arena. For crypto enthusiasts, it’s an invitation to innovate—stay involved as this pro-crypto chapter unfolds!
