Trump Repeals Biden-Era Crypto Tax Rule Requiring Broker Reporting to IRS

President Donald Trump has signed a resolution to repeal the Internal Revenue Service (IRS) tax rule known as the Digital Assets Sale and Exchanges Rule or the DeFi Broker Rule. 

The rule was enacted during the final days of President Joe Biden’s administration. It required DeFi platforms and other developers of non-custodial crypto service providers to report user transaction data to the IRS. It also mandated issuing Form 1099s for non-employment income. However, the bill stirred quite some controversy, with many arguing that it would stifle innovation and infringe on user privacy. 

Regulatory Relief 

The resolution to repeal the rule was introduced by Republican lawmakers, including Senator Ted Cruz and Representative Mike Carey. It subsequently passed both chambers of Congress under the Congressional Review Act. 

Senator Carey, who was present during the signing on Thursday, said that this is the first time a cryptocurrency-related bill has been signed into law in the United States. He emphasized that the DeFi Broker Rule needlessly hindered American innovation and infringed on the privacy of every citizen. 

“The DeFi Broker Rule was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season. By repealing this misguided rule, President Trump and Congress have given the IRS an opportunity to return its focus to the duties and obligations it already owes to American taxpayers instead of creating a new series of bureaucratic hurdles,” he added. 

Crypto advocacy group Blockchain Association CEO Kristin Smith expressed their appreciation to the president and the members of the Congress who supported the resolution to appeal this rule stating: 

“Our industry’s innovators, builders and developers can breathe again thanks to President Trump, Senator Cruz Representative Carey and so many members of Congress on both sides of the aisle who believe in the power of crypto and DeFi. This rule promised an end to the United States crypto industry; it was a sledgehammer to the engine of American innovation.”

President Trump’s recent action aligns with his administration’s pro-crypto stance. He has established a cryptocurrency working group and ordered the creation of a federal bitcoin reserve.

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