US President Donald Trump has signed a law overturning a contentious tax rule introduced in the final days of the Biden administration that expanded the definition of a broker to include decentralised cryptocurrency exchanges.
The Internal Revenue Service (IRS) had updated its reporting guidelines to include DeFi platforms, requiring them to report user transactions.
The cryptocurrency industry strongly opposed the move, arguing that DeFi platforms, unlike traditional exchanges such as Coinbase Global Inc (NASDAQ:COIN) and Kraken, do not act as intermediaries and cannot identify users. Industry voices said compliance with the IRS rules would be impossible and unworkable.
In March, both chambers of Congress voted to scrap the rule using the Congressional Review Act, which allows the reversal of federal regulations with a simple majority.
The IRS rule, finalised in 2024, stemmed from the 2021 Infrastructure Investment and Jobs Act and was intended to improve crypto tax compliance. Trump has styled himself as a pro-crypto president and taken steps to boost the sector.