In a landmark move for the cryptocurrency sector, President Donald Trump has signed into law a resolution overturning a controversial IRS rule introduced under his predecessor Joe Biden.

What Happened: The regulation in question required decentralized finance platforms to adhere to the same taxpayer reporting standards as traditional financial intermediaries.

This marks not only Trump's first crypto-related legislative action but also the first time a sitting U.S. president has signed a crypto-specific bill into law.

The bill nullifies the IRS's proposed DeFi broker rule, which had drawn fierce criticism from industry players and lawmakers alike for its impractical demands and privacy implications.

Representative Mike Carey (R-Ohio), who was present at the signing, said the reversal gives the IRS a chance to concentrate on its existing responsibilities.

He noted the repealed rule would have overwhelmed the agency during tax season and infringed on the privacy of everyday Americans.

The legislation gained rare bipartisan backing in both chambers of Congress, highlighting broad dissatisfaction with the rule—even among Democrats just months after Biden's departure.

Also Read: Ripple, SEC Move To End Legal Dispute As Both Sides Withdraw Appeals

Why It Matters: Crypto advocates argued that the IRS rule was ill-suited to DeFi protocols, which operate autonomously via smart contracts and couldn't realistically comply with traditional broker-based tax frameworks.

Despite strong opposition, the rule was finalized in the final days of Biden's term, prompting backlash from pro-crypto lawmakers and industry stakeholders.

David Sacks, the Trump administration's crypto and AI advisor, labeled the IRS rule a "midnight regulation" and warned that it would suppress innovation, burden developers, and threaten user privacy.

Thursday's signing was welcomed by the crypto community as a significant step forward.

Amanda Tuminelli, Executive Director of the DeFi Education Fund, called the move a turning point in U.S. crypto policy, praising it as a shift toward more thoughtful and practical digital asset regulation.

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