Trump Signs Resolution Blocking IRS Reporting Rule for 'DeFi Brokers'

• On December 27, 2024, the U.S. Department of the Treasury issued last-minute regulations establishing reporting requirements for "trading front-end service providers" involved in digital asset transactions.
• These regulations were created under the Biden Administration's Infrastructure Investment and Jobs Act and aimed to crack down on cryptocurrency users who may have been failing to pay their taxes.
• The reporting requirements were set to take effect in 2026 and required non-custodial services to file a Form 1099 and follow the same reporting rules as securities brokers and custodial digital asset trading platform operators, even though they differ from traditional businesses and do not collect the user information needed to comply with the new rules.
• Earlier this year, Republicans Sen. Ted Cruz of Texas and Rep. Mike Carey of Ohio introduced a joint resolution H.J.Res.25 to overturn the new IRS reporting requirements.
• On February 26, H.J.Res.25 passed out of the Ways and Means Committee with a vote of 26-16, with every committee Democrat present voting no. On March 11, the House passed H.J.Res.25 with a vote of 292-132. On March 26, the Senate passed H.J.Res.25 with a vote of 70-28.
• On Thursday, President Trump has signed the resolution, repealing the controversial rulemaking.

"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. 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. I thank President Trump for signing this important bill into law and Crypto Czar Sacks for his leadership in supporting America’s continued place as the global leader in the emerging crypto industry," said Rep. Mike Carey.

• The move marks the first cryptocurrency bill ever signed into law through Congress, as well as the first tax-related Congressional Review Act of Disapproval (CRA) enacted in the United States.

"This is a big win for good governance. Representative Carey’s resolution ends the Biden Administration’s DeFi Broker rule that never should have been issued in the first place – one that went beyond the scope of the law and would have subjected small businesses and taxpayers to impossible reporting requirements while forcing them to wade through miles of IRS red tape in the process. With President Trump’s signature, we have restored common sense, protected American innovation, and reaffirmed that it is Congress – not unelected IRS bureaucrats – that writes our tax laws," added Jason Smith, Chairman of the Ways and Means Committee.

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