The repeal of the IRS’s “DeFi Broker Rules” has been sent to Trump to be signed into law, a major victory for the crypto industry
The U.S. Senate voted on Wednesday to pass a resolution aimed at repealing the Internal Revenue Service's (IRS) DeFi broker rules. U.S. President Trump is expected to sign into law to revoke this controversial cryptocurrency tax rule that was finalized just weeks before the Trump administration took office. DeFi groups have strongly praised this.
(Preliminary summary: DeFi major victory" The U.S. House of Representatives voted to "abolish the IRS DeFi brokerage U.S. House voter rules")
(Background supplement: The U.S. Senate voted to "abolish the DeFi brokerage rules", Trump supports decentralized finance)
The U.S. Senate voted 70 to 28 on Wednesday to abolish the Internal Revenue Service (IRS) DeFi The resolution on the broker rule will next be sent to US President Trump, who is expected to sign it into law. White House AI and cryptocurrency czar David Sacks said that Trump’s senior advisory team has recommended that he approve the case.
The Senate passed the overturning of the IRS DeFi broker rules
Texas Republican Senator Ted Cruz and Ohio Republican Representative Mike Carey jointly proposed this resolution with the purpose of overturning the DeFi broker rules, which were hastily finalized at the end of the Biden administration, that is, at the end of December last year.
The U.S. Internal Revenue Service (IRS)’s regulatory rules for DeFi brokers are based on the tax reporting requirements derived from the Infrastructure Investment and Jobs Act passed in 2021. The final specifications were officially released on December 27, 2024, and are expected to take effect on New Year’s Day, 2027.
According to this rule, certain "DeFi industry participants" will be required to collect and report user transaction information similar to traditional securities brokers. In addition, they will also be forced to issue 1099 tax forms to users to declare non-employment income such as gambling profits, rents, royalties, etc.
The U.S. Treasury Department stated that this final version of the rule targets front-end service providers that "interact directly with customers" and targets entities that operate major websites connected to DeFi protocols, not the protocols themselves.
The White House on March 4 Japan issued a statement criticizing the rule as "a late-night regulatory action on the eve of the previous administration's resignation, warning that it poses a major threat to privacy.
The Senate voted to overturn the rule earlier this month, and the House of Representatives followed suit. However, because the bill is tied to budget provisions, it will still need another vote in the Senate before it can be sent to Trump for signature.
The industry spoke out in praise
When the rule was first released, it caused strong backlash in the industry, DeFi Organizations such as the Education Foundation filed a lawsuit against the IRS immediately after the rule was released, warning that the move would "force the entire emerging technology industry to go overseas."
Amanda Tuminelli, executive director of the DeFi Education Foundation, issued a statement on Wednesday, saying that overturning the rule is an important step to "protect American innovation and ensure that developers can continue to build cutting-edge technology without vague and overextended regulatory pressure." She praised Congress for passing the case with an "overwhelming bipartisan majority" and recognizing the serious and far-reaching consequences of the IRS's wrong legislation.
