U.S. Passes First Crypto Law as Trump Repeals Controversial IRS Rule
Qadir AK11 Apr 20253 min read
For the first time in history, the United States has officially passed a pro-crypto law — and it’s a big moment for the industry. In a major win for the crypto community, President Donald Trump has signed off on repealing the controversial IRS “DeFi Broker Rule.”
This marks the first time a crypto-focused bill has become law in the U.S., showing a growing shift in how the government views digital assets.
So what exactly was this rule and why did it stir up so much backlash? Let’s break it down.
Key Lawmakers Behind the Push
Crypto advisor David Sacks gave credit to Senators Ted Cruz, Mike Carey, and Bryan Steil for helping move the resolution through Congress.
What Was the DeFi Broker Rule?
The DeFi Broker Rule was originally introduced during the Biden administration and was planned to go into effect in 2027. It would have expanded IRS reporting rules by requiring decentralized finance (DeFi) platforms to report transaction details — including gross proceeds and user data — much like traditional brokers do for stock trades.
Why the Rule Faced Heavy Opposition
Supporters of the rule said it could help reduce tax evasion, especially among wealthy investors. But critics argued that the rule didn’t make sense for decentralized systems, which don’t have centralized operators or access to user records.
Trump’s decision to repeal the rule came after strong pushback from lawmakers and crypto supporters who said it would harm innovation and flood the IRS with data it couldn’t handle. Representative Mike Carey, a key supporter of the repeal, said the rule would have invaded privacy and created confusion during tax season.
Major crypto lobbying groups, like the Blockchain Association, also fought against the rule. They even filed lawsuits calling it an “unconstitutional overreach.” The group’s CEO, Kristin Smith, welcomed the repeal and said it allowed crypto innovators to “breathe again.” She warned that the rule would have seriously damaged the U.S. crypto industry.
How It Happened
The repeal moved quickly through Congress — passing the House in March and the Senate shortly after. President Trump signed it into law on April 10. His support was expected, especially after his advisor David Sacks confirmed Trump’s positive stance on crypto.
The repeal sends a clear signal that the U.S. may be shifting toward more crypto-friendly regulation. Under Trump’s administration, the SEC has already begun to ease back on the tough enforcement actions seen under former SEC Chair Gary Gensler. This suggests a new approach that leans more toward supporting innovation rather than strict oversight.
All in all, this could be the start of a much-needed reset in how crypto is regulated in the United States — and the global industry is watching closely.
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FAQs
- A proposed IRS regulation requiring DeFi platforms to report user transactions like traditional brokers, set to start in 2027.
