• President Donald Trump signed a bill on April 10, 2025, repealing the IRS’s decentralized finance (DeFi) broker rule, which would have required DeFi platforms to report user transactions.

  • The U.S. Justice Department disbanded its National Cryptocurrency Enforcement Team (NCET) on April 8, 2025, narrowing crypto investigations to focus on drug cartels and terrorism.

  • These actions signal a pro-crypto shift, aiming to foster innovation in the $2.55 trillion global crypto market.

  • Industry leaders praise the repeal, arguing the IRS rule was unworkable for DeFi’s automated, intermediary-free systems.

In a sweeping move to reshape U.S. cryptocurrency policy, President Donald Trump has signed legislation nullifying a contentious IRS rule targeting decentralized finance (DeFi) platforms and disbanded the Justice Department’s crypto-focused enforcement unit. These changes, enacted in early April 2025, reflect a lighter regulatory touch, aiming to position the U.S. as a global leader in digital assets while sparking debate over balancing innovation and oversight.

The impact on DeFi, in numbers:

Metric Value Global Crypto Market Cap $2.55 trillion DeFi’s Share of Crypto Transactions ~10% ($255 billion) DeFi Brokers Affected by IRS Rule 650–875 House Vote for Repeal 292-132 (76 Dems, 216 Reps) Senate Vote for Repeal 70-28 Total Value Locked in DeFi $100 billion

Unshackling DeFi: The IRS Rule Repeal

On April 10, 2025, Trump signed a bill overturning an IRS rule finalized in December 2024, which expanded the definition of a “broker” to include DeFi platforms. The rule, rooted in the 2021 Infrastructure Investment and Jobs Act, required these platforms to report user transaction data on Form 1099-DA, similar to traditional exchanges like Coinbase. However, DeFi operates without intermediaries, using automated blockchain protocols, making compliance nearly impossible.

The repeal gained strong bipartisan support. The House of Representatives passed H.J. Res. 25 on March 11, 2025, with a vote of 292-132, including 76 Democrats joining 216 Republicans. The Senate followed on March 26, approving the resolution 70-28. Industry leaders argued the rule threatened innovation. “This is a crucial step towards protecting U.S. innovation,” said Amanda Tuminelli, Executive Director of the DeFi Education Fund, noting that the rule’s vague language could have driven DeFi developers offshore [Decrypt, March 27, 2025].

The IRS estimated the rule would affect 650 to 875 DeFi brokers, with data collection set to begin in 2026 and enforcement in 2027. Critics, including White House crypto policy lead David Sacks, countered that DeFi’s transparency—where funds moving to bank accounts are already taxable—rendered the rule redundant. By repealing it, the U.S. aims to keep its $2.55 trillion crypto market competitive, as DeFi accounts for roughly 10% of global crypto transactions, or $255 billion, according to Chainalysis data.

Shifting Enforcement: NCET Disbanded

On April 8, 2025, the Justice Department dissolved its National Cryptocurrency Enforcement Team (NCET), created in 2022 to tackle crypto-related crimes. Deputy Attorney General Todd Blanche announced the move in a memo, stating, ¨The Department of Justice is not a digital assets regulator”. The NCET had led high-profile cases, including the $4.3 billion Binance settlement in 2023. Now, crypto investigations will focus narrowly on drug cartels, terrorism, and human trafficking, leaving broader regulation to agencies like the SEC and CFTC.

The disbandment aligns with Trump’s January 2025 executive order to promote U.S. leadership in digital finance, which also banned central bank digital currencies (CBDCs). Blanche criticized the Biden administration’s “reckless strategy of regulation by prosecution,” arguing it stifled growth. The shift could reduce compliance costs for crypto firms, which spent an estimated $20 billion on regulatory compliance in 2024, per Coin Center.

Impact on DeFi and Beyond

These regulatory rollbacks signal a crypto-friendly era, but questions remain about oversight gaps. DeFi platforms, which handle $100 billion in locked value globally (DefiLlama, April 2025), thrive on autonomy, yet fraud risks persist. The NCET’s closure may ease pressure on developers but could embolden bad actors if civil regulators don’t fill the void. Still, the industry celebrates.

A post on X echoed the sentiment:

The event yesterday in DC was a watershed moment. At some point, I found myself at a crypto party, with people expressing relief that crypto talent no longer need to flee the country, that crypto people no longer need to worry about getting debanked, and that crypto projects need…

— Emin Gün Sirer (@el33th4xor) March 8, 2025

The changes dovetail with other Trump initiatives, like the Strategic Bitcoin Reserve, housing 200,000 BTC valued at $16 billion at current prices. As the U.S. pivots, global competitors like Singapore, with its clear crypto frameworks, watch closely. For now, DeFi innovators breathe easier, but the balance between freedom and accountability remains delicate.

Two Key Changes: DeFi and Regulatory Shifts

  • IRS Broker Rule Required DeFi platforms to report user data, despite no central entity to comply. Repealed to protect innovation.

  • NCET’s Role Prosecuted crypto crimes but was seen as overreaching. Disbanded to focus on major crimes like terrorism.

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