Nikolas Sargeant
The US Senate has passed a resolution that would overturn a controversial rule requiring decentralized finance (DeFi) platforms to report transaction details to the IRS. The resolution, which passed by a 70-28 vote on March 26, is now set to be signed into law by President Donald Trump. This move follows the House's approval of a similar measure earlier in March, setting the stage for a final repeal of the so-called IRS DeFi broker rule.
The rule, initially introduced during the Biden administration, sought to expand existing IRS reporting requirements to crypto exchanges and decentralized platforms. Its intent was to ensure that DeFi protocols reported gross proceeds from crypto sales and provided information about the participants involved. While the rule was designed to prevent tax evasion, critics argued it was overly burdensome and could stifle innovation in the DeFi space.
Opponents, including the Blockchain Association and legal experts, have voiced concerns that the rule was unworkable, especially for decentralized platforms, and would hinder technological development. Kristin Smith, CEO of the Blockchain Association, praised the Senate vote, emphasizing the importance of removing the rule, which she described as harmful to the industry's growth.
However, the resolution's opponents, such as Democratic Representative Lloyd Doggett, argue that overturning the rule could create a dangerous loophole, potentially facilitating tax evasion and illegal activities. Despite these concerns, Trump is expected to back the resolution, with his administration's stance on crypto regulation becoming a key point of contention in the ongoing debate over digital assets and compliance.
