President Donald Trump Reverses Controversial IRS Rule on Cryptocurrency
President Donald Trump has officially reversed a controversial IRS rule that sought to apply traditional tax reporting requirements to decentralized cryptocurrency platforms.
The move, announced Thursday, signals a major policy shift from the prior administration’s stance on crypto oversight. The rule in question, finalized during the final weeks of President Biden’s term, aimed to treat decentralized finance (DeFi) protocols the same way as centralized crypto exchanges, requiring them to report user transaction data to the IRS. Critics from the crypto sector argued the policy was unworkable. DeFi platforms operate without intermediaries and have no access to user identities, making compliance with such rules technically impossible.
Lawmakers responded quickly. Both chambers of Congress voted earlier this year to scrap the rule through the Congressional Review Act, which allows simple-majority rollbacks of recent federal regulations. Trump’s signature now seals the repeal into law.
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The IRS had introduced the rule in an effort to close crypto tax loopholes, building on mandates from the 2021 Infrastructure Investment and Jobs Act, which classified digital asset brokers as tax-reporting entities. That law was originally aimed at centralized firms like Coinbase and Kraken, but the expanded rule extended that definition to DeFi platforms — sparking backlash.
Since returning to office, Trump has positioned himself as an ally to the digital asset world. He’s made clear he wants the U.S. to embrace blockchain innovation, forming a dedicated crypto task force during his first week and even signing an order in March to begin a federal bitcoin reserve. The decision to axe the IRS rule fits squarely within that broader agenda.
Alexander Stefanov
