The U.S. Senate has voted to repeal a controversial IRS rule targeting decentralized finance (DeFi) platforms, bringing the measure closer to becoming law.
The lawmakers passed the resolution with a 70-28 vote, overturning a regulation that sought to impose tax reporting requirements on DeFi businesses.
The decision comes after a similar resolution by the House of Representatives with bipartisan support. Republican Representative Mike Carey criticized the rule as excessive government overreach, claiming it would invade Americans’ privacy and hinder industry growth. Opponents share concerns that the rule would create heavy regulations on DeFi platforms that typically operate without central intermediaries.
With Congress overturning the regulation, the resolution moves to President Donald Trump for final approval. White House crypto and AI adviser David Sacks has previously affirmed the administration’s support for repealing the rule, making Trump’s signature all but certain.
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
In August 2024, the IRS and U.S. Treasury Department proposed a rule requiring DeFi platforms to report user transactions, specifically gross proceeds from crypto sales, to the IRS. This regulation was finalized in December and aimed to align DeFi platforms with traditional brokerage reporting standards. Critics argue that this requirement undermines decentralization and imposes an undue burden on platforms that usually lack central operators.
The crypto industry has widely welcomed the repeal. Blockchain Association CEO Kristin Smith praised the Senate’s decision, stating that the advocacy group looks forward
“to taking this harmful rule off the books for good.”
The following statement is attributed to Blockchain Association CEO @KMSmithDC following today’s second Senate vote to roll back the DeFi broker rule: pic.twitter.com/S632l8sFAb
— Blockchain Association (@BlockchainAssn) March 27, 2025
Meanwhile, in a related legislative move, Senator Bill Hagerty has introduced an updated version of the GENIUS Act, which is set for a Senate Banking Committee vote on March 13. The bill seeks to enforce stricter regulatory standards for stablecoin issuers, focusing on non-U.S. entities with tougher reserve and compliance requirements. Analysts suggest this may benefit U.S.-based firms like Circle and Ripple, influencing the digital asset regulatory landscape.
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