Trump signs resolution to repeal controversial IRS crypto rule finalized under Biden, lawmaker says

President Donald Trump signed a resolution to repeal a controversial crypto tax rule finalized toward the end of the Biden administration, according to a lawmaker who introduced that measure.

Trump signed the resolution on Thursday, which was expected given that the White House had signaled its support and called the measure a "midnight regulation in the final days of the previous administration." 

Earlier this year, Republicans Sen. Ted Cruz of Texas and Rep. Mike Carey of Ohio introduced a joint resolution to overturn the Internal Revenue Service rule, which was completed in December. The rule set requirements for "custodial brokers" around collecting and reporting user data to the tax agency.

Carey, who said he attended the signing on Thursday, said it was the first crypto bill ever signed into law. 

"By repealing this misguided rule, President Trump and Congress have given the IRS an opportunity to return its focus to the duties and obligations it already owes to American taxpayers instead of creating a new series of bureaucratic hurdles," Carey said in a statement. 

The Senate voted in March to overturn the rule, followed by the House and it went back to the Senate one more time because it was tied to a budget provision. The votes did garner Democratic support, including from Senate Minority Leader Chuck Schumer, though most support stemmed from Republicans.

Trump's signature officially puts an end to the IRS' broker rulemaking, said the DeFi Education Fund's Executive Director Amanda Tuminelli in a statement.

"The DeFi Education Fund commends all members of Congress who supported this resolution, recognizing the importance of protecting software developers and promoting the development of decentralized technologies," Tuminelli said. "President Trump’s signature is a critical signal change for the crypto industry: the United States has embraced a sensible, forward-thinking approach to digital assets."

The rule would have required "decentralized finance industry participants" to operate like traditional securities brokers, mandating that they collect and report user trading data. The rule also would have obligated them to issue Form 1099 tax returns to customers, reporting non-employment income such as gambling winnings, rents and royalties.

According to the U.S. Treasury Department, the finalized rule applied to "front-end service providers" that interact "directly with customers," indicating that it targeted entities running the primary website accessing a decentralized protocol rather than the protocol itself.

"By repealing the IRS’s misguided DeFi broker rule, the administration has ensured that developers and decentralized platforms won’t be subjected to unworkable reporting requirements that threaten privacy and push innovation offshore," said Bo Hines, Executive Director of the President’s Working Group on Digital Assets. "This is a major step forward for financial technology development and securing the United States’ position as the crypto capital of the world."

Update: April 11, 3:55 p.m. UTC to include comments from Hines