In a major policy reversal, President Donald Trump has signed an executive order nullifying the ‘DeFi Broker Rule’ – a controversial regulation introduced during the final months of the Biden administration aimed at increasing tax oversight on cryptocurrency transactions.
What Was the ‘DeFi Broker Rule’? Formally titled ‘Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales’, the rule was scheduled to take effect in 2026. It would have required decentralised finance (DeFi) platforms to report their users’ crypto transaction data to the Internal Revenue Service (IRS).
The aim was to curb tax evasion by improving visibility into crypto trading activity, particularly on decentralized exchanges. However, critics argued that because DeFi platforms are automated software protocols, not traditional brokers, they couldn’t reasonably comply with the rule.
First Crypto Bill Signed Into Law by a US President
This executive order marks a historic moment: the first time a US President has signed a cryptocurrency-related bill into law. Representative Mike Carey of Ohio, who attended the signing ceremony, said, “The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings during tax season.”
He emphasized that the decision allows the IRS to focus on its current responsibilities without introducing new compliance burdens.
The Biden-era rule was expected to generate up to $4 billion (approx. ₹4.6 lakh crore) in revenue for the US Treasury, according to a CNN report. But the Senate voted in March to overturn the rule, citing privacy concerns and its chilling effect on American blockchain innovation.
Trump’s Growing Crypto Support
Since returning to office for a second term, Trump has embraced pro-crypto policies, including:
- Creating a Crypto Task Force under the SEC to accelerate regulatory clarity.
- Signing an executive order to build a national Bitcoin reserve and crypto stockpile.
- Dropping SEC lawsuits against major crypto firms like Binance, Ripple, and OpenSea.
- Pledging to make the US the ‘crypto capital’ of the world.
Earlier this week, the US Department of Justice also disbanded the National Cryptocurrency Enforcement Team (NCET), another Biden-era body created to investigate crypto businesses.
The reversal of the DeFi Broker Rule signals a dramatic shift in Washington’s approach to crypto, moving from regulation-heavy scrutiny toward a more pro-innovation, market-friendly stance. While crypto advocates have applauded the move, others warn it could open the door to renewed concerns about tax compliance and investor protection. With more crypto-related policy changes expected in the coming months, all eyes are now on how Trump’s administration will shape the future of digital finance in America.
