- The U.S. Senate voted 70–27 to repeal an IRS rule mandating DeFi platforms report user transactions, advancing the resolution to the House.
- The White House backed repeal, calling the rule a “midnight regulation” burdening DeFi firms; Trump’s advisor termed it a “last-minute assault.”
The U.S. Senate approved S.J.Res.3 with a 70–27 vote, repealing an IRS regulation that imposed broker reporting requirements on decentralized finance (DeFi) protocols and digital asset custodians.
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 rule, enacted in December 2024, required platforms handling crypto transactions to collect and submit user data to the IRS. The resolution, introduced by Senator Ted Cruz, now proceeds to the House of Representatives. President Donald Trump is expected to sign it into law if passed.
The White House formally supported the repeal on March 4, describing the rule as a hasty measure by the prior administration that would “impose unworkable compliance mandates on DeFi developers.” David Sacks, Trump’s crypto policy advisor, criticized the regulation on social media as a “last-minute assault” on digital asset innovation.
IRS Rule’s Framework and Industry Pushback
The IRS defended the rule as a tool to address tax gaps in crypto markets, asserting it would enhance transparency for taxable events. Opponents, including the Blockchain Association and firms like Coinbase and Uniswap, argued the mandate misapplied traditional broker definitions to non-custodial platforms and automated market makers (AMMs). Over 75 crypto entities joined a coalition stating the rule’s technical infeasibility for decentralized protocols.
Legislative Process and CRA Implications
Under the Congressional Review Act (CRA), congressional repeal bars the IRS from reissuing a similar rule without statutory authorization. The House is likely to pass S.J.Res.3 due to bipartisan backing, with a vote anticipated before April 2025.
Market Response and Fiscal Debate
Kristin Smith of the Blockchain Association called the Senate vote a “decisive win for DeFi,” citing bipartisan consensus against overreach. The IRS projected a $3.9 billion revenue loss over ten years if the rule is revoked.
1/ It’s a big day for DeFi – and the US crypto industry. A bipartisan group of senators (including 18 Democrats) just voted to repeal the DeFi broker rule which would have crippled DeFi in the US.
Thank you @SenTedCruz for your leadership to help kill this rule for good.
— Kristin Smith (@KMSmithDC) March 4, 2025
Supporters of repeal contend the regulation’s broad scope exceeded practical enforcement, while detractors warn of reduced tax enforcement mechanisms.
President Trump will host the first White House Crypto Summit on Friday March 7. Attendees will include prominent founders, CEOs, and investors from the crypto industry. Look forward to seeing everyone there! pic.twitter.com/PEynzDuAOt
— David Sacks (@davidsacks47) March 1, 2025
The SEC has curtailed enforcement actions against crypto entities under Trump’s administration, aligning with broader efforts to streamline digital asset regulations. A White House Crypto Summit on March 7 may address pending policies, including proposals for federal custody of digital assets.
