YEREVAN (CoinChapter.com) — The US Senate voted 70 to 27 on March 4 to repeal an IRS rule that aimed to expand broker reporting requirements to include decentralized finance (DeFi) protocols. The rule would have required decentralized exchanges (DEXs) and other crypto platforms to report gross proceeds from crypto sales and provide details on taxpayers involved in transactions.
The repeal effort now moves to the House of Representatives, which must vote on it before sending it to Donald Trump. David Sacks, the White House’s AI and crypto policy lead, said that Trump supports repealing the rule.
House Lawmakers Pushed to Overturn the IRS DeFi Rule Before Senate Vote
On Feb. 26, House lawmakers advanced a resolution to repeal the rule, but it has not yet been voted on. The Senate’s decision adds pressure for the House to move forward with the repeal.
The rule received criticism for its complexity and feasibility issues. Eli Cohen, general counsel at Centrifuge, a real-world asset (RWA) tokenization platform, said the rule was unworkable in practice. He added that while the repeal prevents platforms from taking on reporting responsibilities, individual taxpayers must still report transactions directly to the IRS.
Crypto Groups React to Senate Vote on IRS DeFi Rule
The decision drew reactions from crypto industry groups. Kristin Smith, CEO of The Blockchain Association, commented on March 4 that the repeal was a significant moment for DeFi and the US crypto industry.
She noted that Congress’ stance on crypto regulation is shifting and that this is the first time such a decision has resulted in action. She also stated that the repeal could impact discussions on stablecoin policies and market structure legislation.
Smith said the Senate vote reflects efforts to maintain DeFi development in the US, reinforcing its role in the domestic financial system.
Next Steps for IRS DeFi Rule Repeal
The repeal must now pass in the House of Representatives before it reaches Trump. Given his stated position on crypto deregulation, expectations remain that he will approve the resolution.
The decision highlights an ongoing debate over crypto regulation and whether policies should focus on stricter oversight or encouraging growth. The repeal vote could influence future stablecoin laws and market structure regulations, shaping the regulatory landscape for crypto in the US.
