#SECGuidance Trump Rolls Back Biden-Era Crypto Tax Rule: A DeFi Win or Political Chess Move?

April 2025 — Washington, D.C.

In a move that’s making waves across both the political aisle and the crypto universe, President Donald J. Trump has officially signed a bill rolling back a controversial tax rule imposed during the Biden administration—one that had cast a regulatory shadow over decentralized finance (DeFi) platforms and self-custody wallet developers.

The legislation, passed under the rarely-used Congressional Review Act, reverses the IRS’s expanded definition of a “broker,” which would have forced DeFi developers and wallet creators—many of whom never interact with user data—to report users' crypto transactions. Critics had called it “unworkable,” “invasive,” and “a threat to U.S. innovation.”

But the repeal isn't just about tax policy.

Let’s rewind.

In 2024, the Biden-era IRS pushed through a rule that reimagined what a “broker” meant in the eyes of tax law. Suddenly, anyone who built a DeFi app or offered a non-custodial wallet could be held responsible for reporting user financial activity to Uncle Sam. The crypto community erupted, saying this was like expecting a hardware store to track what people build with their tools.

Not only was the rule technically difficult to comply with—it was arguably impossible. DeFi platforms and self-custodial wallets don’t collect personally identifiable information by design. That’s the point.

Senator Ted Cruz (R-TX), a long-time advocate for digital freedom, co-sponsored the bill, saying, “We must protect innovation from the heavy hand of bureaucratic overreach.”

Why It Matters

This isn’t just about taxes—it’s about the future of crypto in America.

Had the rule remained, many crypto startups would likely have packed their bags and moved offshore to more crypto-friendly jurisdictions. Investors and developers feared a brain drain.

“It’s a win, yes—but what we need next is smart regulation, not no regulation."

Trump is holding up the trophy—for now.