President Donald Trump has formalized the repeal of an IRS rule targeting decentralized finance (DeFi) platforms by signing a resolution into law.
This action, confirmed in a press release from Representative Mike Carey, effectively nullifies regulations that would have obligated DeFi platforms to report cryptocurrency transaction details and gather customer data.
Representative Carey, alongside Senator Ted Cruz, initially introduced the measure in December.
Innovation, Privacy, and Burdensome Compliance
The press release emphasized the landmark nature of this event, stating it marks the first time a cryptocurrency bill has become law and the first tax-related Congressional Review Act of Disapproval (CRA) to be enacted.
Representative Carey commented that the DeFi Broker Rule unnecessarily impeded American innovation, violated the privacy of average citizens, and threatened to overwhelm the IRS with a flood of new filings.
He asserted the IRS lacks the resources to manage such volumes during tax season.
Representative Carey expressed gratitude to President Trump for signing the significant bill and to Crypto Czar Sacks for his support in maintaining America’s leading position in the burgeoning cryptocurrency sector.
Resolution’s Immediate Impact and Long-Term Implications
The resolution, known as H.J.Res.25, is specifically designed to nullify the IRS rule officially titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.”
This IRS rule, initiated in the final period of the Biden administration, broadened the definition of “broker.”
The expanded definition encompassed non-custodial entities like DeFi platforms and trading front-end service providers.
This broader scope would have required DeFi projects to report gross earnings from cryptocurrency sales and collect taxpayer details, such as identities and transaction histories.
Upon enactment of the resolution, the IRS rule immediately becomes void and “has no force or effect.”
This directly eliminates the mandates for DeFi platforms and other digital asset brokers to report gross sales proceeds on Form 1099.
This repeal addresses concerns from many within the crypto industry, including the Blockchain Association, who argued that these compliance requirements were impractical and would stifle innovation.
The measure moved through Congress with bipartisan support.
It initially passed the Senate on March 4th and subsequently the House the following week.
A final vote in the Senate was necessary due to its fiscal implications before sending it to the President for signature.
The Senate finalized the repeal of the controversial crypto tax rule with a vote on March 26th, setting the stage for presidential approval.
Also Read: Trump Signs Crypto Bill Repealing IRS Rule on DeFi
