Former President Donald Trump has signed legislation repealing a controversial expansion of IRS rules that would have broadened the definition of a cryptocurrency “broker,” a move hailed by digital asset advocates as a win for innovation and privacy. The decision nullifies a Biden-era policy intended to increase tax reporting requirements within the crypto industry.
According to lawmakers supporting the repeal, the overturned rule would have required a wide range of crypto participants—including miners, developers, and wallet providers—to collect and report customer data to the IRS, even when they lacked direct access to personal information. Critics argued the provision was unworkable and risked driving U.S. blockchain innovation offshore.
As reported by policy analysts, the broker rule was originally introduced under the 2021 Infrastructure Investment and Jobs Act, sparking industry backlash over concerns that the language was too vague and could place an undue burden on non-custodial service providers. Legal experts warned that enforcement would create compliance risks and stifle technological development in the digital asset space.
The bill, passed with support from several congressional Republicans and some centrist Democrats, reflects growing bipartisan interest in creating a clearer, more innovation-friendly regulatory framework for cryptocurrencies. Proponents of the repeal say it lays the groundwork for more tailored rules that better reflect the operational realities of blockchain technology.
While the repeal does not remove all tax reporting obligations for crypto investors, it does limit the IRS’s ability to impose sweeping data requirements on ecosystem participants who do not directly handle customer funds. Lawmakers who supported the bill emphasized the importance of striking a balance between effective oversight and maintaining the U.S.’s competitiveness in digital finance.
The move is expected to rekindle debates over crypto taxation and regulation, particularly as Congress continues to weigh broader digital asset policy reforms. Industry groups are now pushing for comprehensive legislation that distinguishes between different types of crypto entities, such as decentralized protocols, custodial exchanges, and validators.
