Trump Signs First Crypto Law, Repeals IRS "DeFi Broker Rule"

On April 10, 2025, President Donald Trump officially signed a bill introduced by Ohio Representative Mike Carey, effectively repealing the Internal Revenue Service's (IRS) rules on digital asset sales and transactions, known as the "DeFi Broker Rule." This new law not only abolishes the existing DeFi Broker Rule but also explicitly prohibits the IRS from enacting similar regulatory measures in the future without Congressional legislation, providing long-term legal protection for cryptocurrency wallets and the decentralized finance (DeFi) ecosystem.

The signing of this bill marks the first cryptocurrency-related legislation to become law in U.S. history and is also the first tax-related Congressional Review Act of Disapproval (CRA) signed into law. The "DeFi Broker Rule" originated from the cryptocurrency tax provisions added to the 2021 Infrastructure Investment and Jobs Act, requiring "digital asset brokers" to collect and report detailed user transaction data to the IRS. The rules also mandate DeFi brokers issue Form 1099 tax returns to their customers, reporting non-employment income. However, the rule controversially classified self-custody wallets, non-custodial DeFi protocols, and even miners as "brokers," sparking strong opposition from the industry. Mike Carey stated, "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 that it doesn’t have the infrastructure to handle during tax season."

Notably, the bill passed through the Congressional Review Act (CRA) process, a rare legislative tool that allows Congress to overturn agency rules with a simple majority. Since the CRA's enactment in 1996, only a very small number of rules have been repealed through this process, highlighting the political and industrial impact of this decision. "By repealing this misguided rule, President Trump and Congress have given the IRS an opportunity to return its focus to the duties and obligations it already owes to American taxpayers instead of creating a new series of bureaucratic hurdles,” Carey said in a statement.

"Our industry's innovators, builders, and developers can breathe again," Kristin Smith, CEO of the Blockchain Association, commented in an April 10 statement.

With the passing of the bill, DeFi platforms like Uniswap and Aave will be relieved from burdensome compliance requirements. HTX market data has shown a widespread increase in DeFi sector prices. ORCA saw a 63.73% rise over the past 24 hours, currently trading at $3.03. CRV increased by 20.52%, now priced at $0.6017. CVX rose by 17.64%, currently at $2.1203. SPELL experienced a 14.73% increase, now at $0.000584, and AUCTION surged by 13.71%, currently trading at $13.213.

Trump's signing of this bill continues his second-term stance of friendliness towards the crypto industry. During the 2024 campaign, Trump pledged to "make the United States the world's crypto capital" and criticized the Biden administration for overregulating the blockchain industry. In early 2025, he appointed crypto-friendly individuals to key positions at the SEC and CFTC, sparking market expectations for more lenient policies. Additionally, the Trump administration plans to push for other crypto-related legislation, including clear classification of digital assets and a regulatory framework for stablecoins.