Key Takeaways
- The White House supports a congressional resolution to repeal an IRS rule impacting DeFi platforms.
- The rule required DeFi participants to report detailed transaction and taxpayer information, causing privacy concerns.
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The White House has expressed strong support for a joint resolution to overturn an IRS rule that imposes extensive disclosure requirements on DeFi projects, Trump’s AI and crypto czar announced Tuesday.
The White House is pleased to announce its support for the CRA introduced by @SenTedCruz and @RepMikeCarey to rescind the so-called Broker DeFi Rule, an 11th hour attack on the crypto community by the Biden administration. pic.twitter.com/T7Hxasb4aC
— David Sacks (@davidsacks47) March 4, 2025
The resolution, known as S.J. Res. 3, was introduced by Senator Ted Cruz and Representative Mike Carey on January 21. It aims to repeal the IRS’ “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.”
The rule, issued last December, expands the definition of “broker” to include software that processes DeFi transactions. Under this definition, DeFi projects would need to report gross proceeds from crypto sales and collect taxpayer data, including identities and transaction histories.
The rule has been met with strong opposition from the crypto industry. The Blockchain Association has criticized it as a misinterpretation of DeFi technology and a threat to innovation.
Senator Cruz’s measure seeks to prevent the implementation of burdensome information reporting requirements on DeFi participants, addressing concerns about privacy and the sharing of taxpayer personal information, as well as supporting innovation in the American digital asset industry.
“This rule, issued as a midnight regulation in the final days of the previous Administration, would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies,” according to the White House’s statement.
The White House indicated that if Congress passes the resolution, the President’s senior advisors would strongly recommend signing it into law.
US Senate set to vote on revoking IRS’s DeFi rules
The US Senate is set to vote this week on overturning two Biden-era regulations related to digital assets, a person familiar with the Senate’s planning told CoinDesk on Monday.
The first is the IRS rule that expands the definition of “broker” to include DeFi projects.
The second is a CFPB rule that would subject large tech companies processing high volumes of consumer payments through digital wallets and payment apps to stricter regulation similar to major US banks.
Both resolutions are being brought forward under the Congressional Review Act, which allows Congress to overturn recent federal regulations.
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