Trump overturns IRS DeFi tax rule, marking first pro-crypto victory in Congress

US President Donald Trump has signed a resolution overturning a controversial Internal Revenue Service (IRS) rule that imposed broker-style tax reporting obligations on decentralised finance (DeFi) platforms.

The landmark reversal, passed with strong bipartisan support in both chambers of Congress, marks the first successful pro-crypto legislation to clear the US Capitol, reported Coindesk.

The regulation, introduced during the final days of former President Joe Biden's administration, sought to classify DeFi protocols as brokers—requiring them to track and report user transactions. 

Using the Congressional Review Act, lawmakers led by Representative Mike Carey (R-OH) struck down the rule and barred the IRS from reintroducing similar measures in the future.

The market responded positively to the news. 

Major DeFi tokens such as Uniswap (UNI) surged by 8.3 per cent, Aave (AAVE) climbed 7.1 per cent, and Maker (MKR) rose 6.5 per cent in the 24 hours following the announcement. 

Analysts pointed to renewed investor confidence in the DeFi space as regulatory pressures eased.

Broader crypto markets, all the same, remain under pressure due to escalating global trade tensions. 

Ongoing tariff wars—particularly between the US and China—have spooked investors, leading to a 4.2 per cent drop in Bitcoin (BTC) and a 5.6 per cent slide in Ethereum (ETH) over the past week.

Next on the congressional docket is long-anticipated stablecoin legislation, with similar bills already clearing key committees in both the House and Senate. Lawmakers are eyeing a final compromise bill by August, in line with President Trump's call for swift action on regulatory clarity.

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