In the last weeks of the Biden administration in December, the IRS updated its crypto tax reporting rule that it had finalised earlier in 2024 to clarify that its new guidelines would also apply to decentralized finance – or DeFi – exchanges.
US President Donald Trump on Thursday (April 10) signed into law a bill to overturn a revised rule from the Internal Revenue Service that expanded the definition of a broker to include decentralized cryptocurrency exchanges, according to a statement from the White House.
In the last weeks of the Biden administration in December, the IRS updated its crypto tax reporting rule that it had finalized earlier in 2024 to clarify that its new guidelines would also apply to decentralized finance – or DeFi – exchanges.
Crypto industry participants argued that because DeFi exchanges don’t act as intermediaries, they don’t have visibility into who their users are, making it impossible to comply with the IRS rules.
The new IRS framework finalised last year aimed to crack down on crypto users who may be failing to pay their taxes, and stemmed from the $1 trillion bipartisan 2021 Infrastructure Investment and Jobs Act. It required digital asset brokers to send the forms to both the IRS and digital asset holders to assist with their tax preparation.
Trump on the campaign trail pledged to be a “crypto president” and courted cash from the industry by promising to promote the adoption of digital assets.
In his first week in office, Trump ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations, and in March signed an executive order to create a federal stockpile of bitcoin.
