Trump Repeals IRS Rule on Crypto Brokers Finalized in Biden’s Final Days

Trump repeals IRS rule requiring crypto brokers to report user data.

Senate and House passed a resolution with bipartisan support.

Rule targeted DeFi platforms as traditional broker equivalents.

President Donald Trump has signed a resolution revoking a crypto-related IRS rule issued during the last phase of the Biden administration. The measure, introduced earlier this year, specifically targeted a regulation requiring custodial brokers to collect and report crypto user data to the IRS. This regulation, finalized in December, received strong opposition from members of both parties in Congress.

White House Endorses Repeal of Finalized IRS Rule

The now-repealed rule mandated that entities interacting with crypto users, particularly front-end service providers, gather and submit personal trading information to the tax agency. These entities included those operating the primary interfaces of decentralized finance protocols. The regulation would have compelled them to treat digital asset users similarly to traditional securities customers.

The White House had already expressed support for overturning the regulation, labeling it a “midnight rule.” That term was used to describe rules finalized during the final days of an outgoing administration. The resolution gained further traction when it passed the Senate in March and then advanced through the House before returning to the Senate due to its budget-related attachment.

Approval for the abolition came mostly from Republicans. However, a digit of Democrats, including Senate Minority Leader Chuck Schumer, also supported the move. The rule had raised concerns regarding its application to decentralized technologies and those building them.

First Crypto Law Signed Under Trump Presidency

According to a post by Documenting Bitcoin on X, the recent development confirms the first law to be signed by President Trump. Rep. Mike Carey of Ohio, who co-sponsored the resolution with Sen. Ted Cruz of Texas, confirmed attending the signing

Carey stated this marked the first crypto-related law signed by Trump. According to Carey, the repeal enables the IRS to refocus on existing obligations without introducing additional bureaucratic requirements for digital asset stakeholders.

Amanda Tuminelli, Executive Director of the DeFi Education Fund, confirmed the impact of the resolution. She noted that Trump's signature effectively ends the IRS rulemaking on digital asset broker requirements. Tuminelli said that the final rule had attempted to treat decentralized service providers as though they were conventional intermediaries.

Rule Required Broader Tax Reporting Measures

Besides collecting transaction data, the rule also included the responsibility of issuing Form 1099s to users. These forms are typically used to report various non-employment income sources, including gambling winnings and royalties. The IRS rule had included decentralized finance players within the definition of “brokers,” despite their non-traditional operational structures.According to the U.S. Treasury, the rule focused on entities that maintain direct contact with customers. The regulation explicitly mentioned front-end service providers that act as gateways to decentralized platforms. By repealing the rule, the legislative and executive branches have nullified a regulation that would have extended existing tax laws to parts of the crypto ecosystem.