President Trump Makes History With First Crypto Bill Signing
U.S. President Donald Trump signed a bill into law on Thursday that reverses a revised rule by the Internal Revenue Service (IRS) which expanded the definition of a broker to include decentralized cryptocurrency exchanges.
The White House confirmed the decision in a statement on the same day.
The IRS had introduced this revision during the final weeks of the Biden administration, updating its crypto tax reporting rule, which it had initially finalized in December 2024. The revision aimed to clarify that the new guidelines would also apply to decentralized finance (DeFi) exchanges.
Congressional Action Against IRS Rule
The bill to overturn the IRS’s revision was passed by both the House of Representatives and the Senate in March, using the Congressional Review Act. This act allows Congress to reverse new federal regulations with a simple majority vote.
The cryptocurrency industry had strongly criticized the revised rule, arguing that it was not feasible for DeFi platforms. Industry participants had urged Republicans to repeal the rule, citing the unique structure of decentralized exchanges compared to traditional centralized exchanges like Coinbase and Kraken.
The Issue with DeFi Exchanges
Unlike centralized exchanges, which act as intermediaries between buyers and sellers, DeFi platforms operate without intermediaries. These platforms allow users to transact directly through blockchain networks, which are the backbone of most cryptocurrencies.
Critics of the IRS rule argued that because DeFi exchanges do not act as intermediaries, they cannot track their users or collect the necessary information to comply with the IRS’s reporting requirements. This lack of visibility into user transactions makes it virtually impossible for DeFi platforms to meet the tax reporting guidelines laid out by the IRS.
Background on IRS Framework
The IRS’s updated framework, which was finalized last year, was part of a larger effort to crack down on crypto users who might not be paying their taxes. The new guidelines stemmed from the $1 trillion bipartisan Infrastructure Investment and Jobs Act of 2021, which required digital asset brokers to submit forms to both the IRS and the asset holders to aid in tax preparation.
With the bill now signed into law, the cryptocurrency industry has succeeded in halting the IRS’s expanded definition of brokers, securing a major win for DeFi platforms and other stakeholders in the crypto space.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a "detective-like" mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
