In a landmark move for the U.S. digital asset industry, President Donald Trump on Thursday signed the first crypto-related bill in U.S. history, overturning a controversial IRS rule that had threatened the future of decentralized finance (DeFi) in America.
The newly signed law eliminates a Biden-era regulation that aimed to classify DeFi platforms as brokers, requiring them to collect and report detailed taxpayer information—an obligation critics argued was technically unworkable and a privacy threat.
Industry and Lawmakers Applaud Trump’s Pro-Crypto Shift
The bill’s passage, led by Rep. Mike Carey (R-Ohio) and supported by a bipartisan coalition in both the House and Senate, represents a rare show of unity in crypto regulation. Carey, present at the signing ceremony, highlighted the repeal as a victory for American innovation and taxpayer rights.
“The DeFi Broker Rule needlessly hindered innovation and would have overwhelmed the IRS with data it couldn’t process,” said Carey in a public statement.
Biden-Era Regulation Slammed by Crypto Advocates
The original DeFi broker rule, introduced by the IRS in 2023, sparked immediate backlash from blockchain developers, privacy advocates, and pro-crypto lawmakers. Designed during President Joe Biden’s final months in office, the rule attempted to apply legacy financial reporting standards to decentralized protocols that operate autonomously via smart contracts.
Industry voices warned that the regulation would cripple DeFi innovation, as protocols are not capable of KYC compliance like traditional brokers.
The Trump administration, sensing the growing tension, backed the repeal effort last month. David Sacks, the administration’s AI and crypto advisor, branded the IRS rule a “midnight regulation” that would “stifle innovation and burden DeFi projects with impossible compliance standards.”
DeFi Community Celebrates a New Chapter
The signing was hailed across the crypto ecosystem as a historic moment.
“Digital asset regulatory history was made in the U.S. today,” said Amanda Tuminelli, Executive Director of the DeFi Education Fund, in a statement to Decrypt.
“President Trump’s signature is a critical signal change for the crypto industry: the U.S. has embraced a sensible, forward-thinking approach to digital assets.”
The move marks a significant departure from the previous administration’s regulatory stance and sets a precedent for crypto-friendly governance at the federal level.
As of now, crypto leaders are watching closely for what comes next. With the IRS DeFi broker rule repealed, the door is open for more practical, innovation-driven regulation that supports Web3 growth in the United States.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
