Trump signs amendment bill to repeal IRS crypto broker rules

On April 11, 2025, US President Trump signed a joint congressional resolution officially abolishing the "broker rules" extended by the Internal Revenue Service (IRS) for the cryptocurrency industry. The following is a comprehensive analysis of the background, content, and impact of the bill:

Background and Legislative Process

1. Controversy Over Biden-Era Rules
   The IRS cryptocurrency tax rules originated from the 2021 Infrastructure Investment and Jobs Act, which required crypto brokers to collect and report user transaction information (e.g., Form 1099). In late 2024, the Biden administration expanded the definition of "broker" to include decentralized finance (DeFi) platforms, subjecting them to the same compliance obligations as centralized exchanges. However, the industry argued that these rules were unworkable for DeFi platforms, as they could not collect user identity information like centralized entities and conflicted with blockchain’s anonymity principles.
2. Congressional Action to Overturn the Rules
   • House and Senate Momentum: In March 2025, the U.S. House of Representatives passed the repeal resolution with a 292-132 vote, followed by bipartisan "supermajority" support in the Senate. Due to procedural budget rules, the Senate held a revote on March 26 before final approval and submission to Trump.
   • Trump’s Swift Approval: Trump’s advisors had previously recommended supporting the resolution, and he signed it into law on April 11. This marked the first cryptocurrency-related bill signed by a U.S. president.

Key Provisions of the Bill

1. Narrowing the Definition of "Broker"
   The bill overturns the IRS’s expanded interpretation of "cryptocurrency brokers," explicitly excluding DeFi platforms, miners, and validators from the definition. Compliance requirements now apply only to centralized exchanges (e.g., Coinbase, Kraken) and custodial service providers.
2. Permanent Ban on IRS Reintroducing Similar Rules
   Under the Congressional Review Act, the IRS is permanently barred from reintroducing tax reporting rules targeting DeFi platforms in the same form.

Industry and Political Implications

1. Positive Industry Response
   The crypto industry welcomed the bill for resolving DeFi platforms’ compliance challenges and avoiding privacy concerns tied to forced data collection. The DeFi Education Fund called it a "positive signal for decentralized technology," while centralized exchanges like Coinbase benefited from clearer regulations.
2. Criticism and Risks
   Critics warned that loosened oversight could create loopholes for tax evasion, money laundering, and illicit finance. Estimates suggest the repeal could cost the U.S. $40 billion in lost tax revenue over a decade and weaken oversight of crypto transactions.
3. Trump’s Political Strategy
   Trump, who pledged during his campaign to be a "pro-crypto president" by reducing regulations to foster innovation, used the bill to appeal to crypto industry donors and younger voters. This aligns with his earlier efforts to establish a crypto task force and propose a federal Bitcoin reserve.

Future Challenges and Key Considerations

1. Balancing Regulation and Innovation
   While the bill alleviates industry pressure, long-term debates will focus on balancing financial crime prevention with technological growth, particularly around compliance standards for centralized exchanges or new regulatory frameworks.
2. Global Policy Coordination
   The U.S. stance contrasts with stricter regulations in jurisdictions like the EU, potentially influencing competition over global crypto market governance.
3. Election and Legal Risks
   Democrats may frame Trump’s move as "catering to capital interests." Major crypto-related scandals (e.g., fraud or systemic risks) could also become liabilities for his reelection campaign.

For details, refer to the original Reuters article or financial analysis from sources like Stockstar and Sina Finance.