Trump Overturns IRS Rule Targeting DeFi Platforms
President Trump repeals IRS rule that required DeFi platforms to report user data, marking a win for crypto privacy.
- Trump signs resolution reversing IRS rule on DeFi reporting.
- The rule mandated data reporting from decentralized platforms.
- Seen as a major win for DeFi privacy and innovation.
Trump Shuts Down IRS Rule Cracking Down on DeFi
In a pivotal move for the decentralized finance (DeFi) sector, President Donald Trump has signed a resolution overturning an IRS regulation that targeted user data collection from DeFi platforms. This rule, introduced during the Biden administration, sought to extend traditional broker reporting obligations—such as issuing Form 1099s—to decentralized and non-custodial platforms.
Trump’s decision to roll back the rule signals a strong stance in favor of crypto privacy and innovation, particularly in the rapidly growing DeFi space.
What the IRS Rule Meant for DeFi
The IRS rule aimed to impose stricter tax reporting requirements by classifying decentralized platforms as brokers. This would have forced these platforms to track and report users’ transaction details to the IRS, a challenge given DeFi’s core principle of user autonomy and anonymity.
Had it remained in place, the rule could have imposed heavy compliance burdens on DeFi developers and protocols—many of which operate without centralized control or access to user data. The regulation sparked immediate backlash from the crypto community, which viewed it as both impractical and harmful to the ethos of decentralization.
A Legislative Win for the Crypto Community
The resolution to repeal the IRS crypto rule was championed by Republican lawmakers, including Senator Ted Cruz and Representative Mike Carey. After gaining bipartisan support in both chambers of Congress, the resolution made its way to President Trump, who swiftly signed it into law.
This development is being hailed as a major victory for blockchain innovators and privacy advocates. It also marks a turning point in how the federal government may choose to handle DeFi in future legislation—possibly with more nuance and respect for decentralization.
