Trump Revokes IRS DeFi Broker Rule, Signaling Major Win for Crypto Industry

Date: April 10, 2025
Author: Zoltan Vardai
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In a landmark decision that has garnered significant attention in the cryptocurrency world, U.S. President Donald Trump has officially overturned the Internal Revenue Service (IRS) DeFi broker rule. This move is considered a substantial victory for decentralized finance (DeFi) protocols, which have faced increasing regulatory scrutiny in recent years.

Overturning the DeFi Broker Rule

On April 10, 2025, Trump signed a joint congressional resolution that nullified the IRS rule initially proposed during the Biden administration. Set to go into effect in 2027, the DeFi broker rule would have expanded the IRS’s existing reporting requirements to cover decentralized finance platforms. Under this proposed measure, DeFi protocols would have been mandated to disclose transaction information such as gross proceeds from crypto sales and the identities of taxpayers involved, which many in the industry argued would lead to overwhelming compliance burdens for both taxpayers and the IRS.

Representative Mike Carey, a supporter of the resolution, praised the decision, stating, “The DeFi Broker Rule needlessly hindered American innovation and infringed on the privacy of everyday Americans.” Carey emphasized that the proposed rule would have resulted in a surge of new filings that the IRS would, at least at present, be ill-equipped to handle during tax season.

Representing the interests of a burgeoning crypto sector, this resolution marks a significant step in establishing a more favorable regulatory environment for DeFi and broader cryptocurrency usage in the U.S.

Implications for the Crypto Ecosystem

Charles Hoskinson, the founder of Cardano, commented on the evolving landscape of cryptocurrency regulation at the recent Paris Blockchain Week 2025. He noted that clearer regulatory frameworks are likely to entice more tech giants into the DeFi and Web3 space. However, he also warned existing crypto projects that they need to adopt more collaborative tokenomics to thrive against larger centralized technology firms that could potentially overshadow them.

During his speech, Hoskinson criticized the current “circular economy” within the cryptocurrency market, where the growth of one token often leads to the decline of another, stymying overall industry expansion. He asserted that the future of cryptocurrency hinges on finding cooperative economic models that can withstand competition from formidable companies like Apple, Google, and Microsoft.

Broader Market Landscape

In associated news from the cryptocurrency sector, Bitcoin has faced some volatility in light of global market conditions. Recent analysis indicated that Bitcoin experienced a steep sell-off over the weekend, coinciding with a significant dip in the S&P 500, ultimately dropping below $75,000 from a previous high of $82,000. Lucas Outumuro, the head of research at crypto analytics platform IntoTheBlock, suggested that Bitcoin’s continuous trading access could lead to increased correlation with traditional stock market shifts.

Moreover, Bybit, a notable cryptocurrency exchange that suffered a $1.4 billion hack earlier this year, has managed to reclaim market share, reflecting a resilient recovery as it implements improved security measures.

Meanwhile, an alarming situation unfolds for nearly 400,000 creditors of the failed FTX exchange, who risk missing out on approximately $2.5 billion in repayments due to incomplete Know Your Customer (KYC) verification processes. This predicament highlights the ongoing challenges faced within the cryptocurrency industry involving regulatory compliance and user participation.

Conclusion

Trump’s revocation of the DeFi broker rule is seen as a pivotal moment in the ongoing evolution of cryptocurrency regulation in the United States. As the government endeavors to clarify and adapt regulatory structures to accommodate the rapidly advancing world of decentralized finance, stakeholders within the crypto community will be keenly observing how these changes may foster innovation while balancing privacy and compliance challenges.

Stay tuned for further developments in the crypto space as the dynamics of regulation continue to unfold.

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