On April 10, 2025, President Donald Trump signed a landmark resolution abolishing a disputed IRS rule on Decentralized Finance (DeFi) platforms, a major victory for the cryptocurrency community. This action scraps a late-2024 Biden administration rule that classified most DeFi projects as “brokers” with strict tax reporting duties. Supported across party lines in Congress, this repeal favors crypto innovation over heavy oversight. This article examines the rule’s end, its context, and its effects on the crypto market in 2025.
The IRS Rule’s Details
Implemented in December 2024, the IRS rule required DeFi platforms—like decentralized exchanges and lending systems—to collect and report user transaction data, similar to traditional brokers. It mandated Form 1099s for crypto trading profits, a demand critics labeled “unworkable” given DeFi’s decentralized setup. Unlike Binance or Coinbase, DeFi protocols use smart contracts on blockchains like Ethereum, lacking a central enforcer. The rule threatened to stifle creativity, exile projects, and overwhelm developers.
Opposition surged fast. The DeFi Education Fund and industry figures argued it undermined blockchain technology’s privacy and freedom. X users hailed the repeal as a “crypto freedom milestone.” The U.S. House passed a resolution in March 2025, followed by a 70-28 Senate vote, a rare bipartisan stand against excessive rules.
Trump’s Crypto Support
A crypto champion since 2024, Trump quickly signed the repeal, aligning with his push to remove digital asset barriers. Moves like establishing a Bitcoin reserve and naming Paul Atkins as SEC Chairman highlight this agenda. David Sacks, White House Crypto and AI Advisor, affirmed Trump’s intent to “end restrictive regulations,” supporting his aim to make the U.S. a crypto hub. This repeal rejects the Biden “midnight rule,” criticized for throttling DeFi innovation.
Effects on DeFi and Beyond
The repeal frees DeFi from burdensome reporting, boosting adoption as crypto markets grow—Bitcoin reached $109,000 in January 2025 (Investopedia). It hints at a hands-off regulatory shift under Trump, possibly benefiting Ethereum and Solana in DeFi ecosystems. Some Democrats flag tax loophole concerns, a topic set to linger.
Conclusion
Trump’s repeal of the IRS DeFi rule on April 10, 2025, marks a key moment for cryptocurrency in the U.S. By axing an unfeasible rule, it sets DeFi up to thrive, enhancing America’s blockchain role. For crypto fans, it’s time to act—watch this pro-crypto era unfold!
