Congress Repeals IRS DeFi Broker Rule in a Landmark Decision

The IRS DeFi broker rule, introduced during the Biden administration, was once designed to extend IRS tax reporting essential to DeFi platforms

The Biden administration’s DeFi broker rule, which would have required decentralised exchanges (DEXs) to report gross proceeds from sales and provide transaction details to the IRS, is being repealed.

The Senate voted 70-28 on Friday to overturn the rule, which follows a similar vote by the House on Thursday. The resolution will now go to Trump for his approval, which is broadly expected. Supporters of the repeal, which includes several industry leaders and policymakers, have welcomed the decision.

"President Trump supports the repeal of the IRS DeFi broker rule," confirmed David Sacks, the White House’s AI and crypto advisor.

This signals a shift in the administration's stance on crypto regulation, which has seen a focus on bipartisan cooperation in recent months.

"This is a victory for crypto and Web3 innovation," added Blockchain Association CEO Kristin Smith.

"The rule would have negatively impacted the structure of DeFi and limited the potential for innovation in the crypto space."

Meanwhile, Eli Cohen, general counsel at Centrifuge, criticised the rule, stating that it was "unworkable in practice" and would have created unnecessary burdens for decentralised exchanges.

"It's a moment to celebrate for those who value innovation, efficiency, and the principles of decentralised finance," Cohen stated.

However, despite the support from the crypto industry, some policymakers are strongly opposed to the decision to repeal the IRS DeFi broker rule.

Democratic Representative Lloyd Doggett has been one of the most outspoken critics, arguing that repealing the rule creates a "loophole for tax cheats, drug traffickers, and terrorist financiers."

According to Doggett, wealthy individuals will now use decentralised exchanges to avoid taxes and move massive sums of money without any oversight.

"This is a special activity exemption that exceptionally benefits Republican donors who have invested in DeFi platforms," he added.

The move comes as Congress is working on broader legislation to regulate the crypto industry. A bipartisan group of lawmakers has introduced a bill that would create a comprehensive framework for the industry, covering everything from stablecoins to privacy coins.

The bill, which is still in the early stages of discussion, would also give the IRS the authority to collect taxes on crypto transactions.

Many experts believe that Congress needs to take the lead in shaping long-term crypto policy rather than relying on executive orders or temporary resolutions.

"It's crucial for Congress to intervene and establish clear, enduring crypto laws that align with the technological and economic realities of the industry," urged a spokesperson for the Node, a blockchain policy group.

"We need legislation that fosters innovation, protects consumers, and cements the U.S.'s role as the global leader in this rapidly developing sector."

As Trump is expected to approve the repeal of the IRS DeFi broker rule, the focus will now shift to how the administration plans to address crypto policy in the long term.

This move has broad implications for the future of crypto in the U.S. and could have a significant impact on the industry's ability to innovate and grow.

The post Trump May Approve IRS DeFi Broker Rule Repeal as Senators Vote 70-28 appeared first on TokenPulse.

The post Trump May Approve IRS DeFi Broker Rule Repeal as Senators Vote 70-28 appeared first on TokenPulse.

The Biden administration’s DeFi broker rule, which would have required decentralised exchanges (DEXs) to report gross proceeds from sales and provide transaction details to the IRS, is being repealed.

The Senate voted 70-28 on Friday to overturn the rule, which follows a similar vote by the House on Thursday. The resolution will now go to Trump for his approval, which is broadly expected.

Several industry leaders and policymakers have welcomed the decision, which comes as no surprise given the bipartisan support for overturning the rule.

"President Trump supports the repeal of the IRS DeFi broker rule," confirmed David Sacks, the White House’s AI and crypto advisor.

This signals a shift in the administration’s stance on crypto regulation, which has seen a focus on bipartisan cooperation in recent months.

"This is a victory for crypto and Web3 innovation," added Blockchain Association CEO Kristin Smith.

"The rule would have negatively impacted the structure of DeFi and limited the potential for innovation in the crypto space."

Meanwhile, Eli Cohen, general counsel at Centrifuge, criticised the rule, stating that it was “unworkable in practice” and would have created unnecessary burdens for decentralised exchanges.

“It’s a moment to celebrate for those who value innovation, efficiency, and the principles of decentralised finance,” Cohen stated.

However, despite the support from the crypto industry, some policymakers are strongly opposed to the decision to repeal the IRS DeFi broker rule.

Democratic Representative Lloyd Doggett has been one of the most outspoken critics, arguing that repealing the rule creates a “loophole for tax cheats, drug traffickers, and terrorist financiers.”