U.S. Senate to Vote on IRS Broker Rule This Week: Report

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CryptoNews2025/03/04 07:11

By:Julia Smith

Senate set to challenge a new IRS mandate that recasts DeFi platforms as brokers. Critics warn the shift could hamper crypto innovation and push digital finance overseas.

Last updated: March 3, 2025 15:07 EST

U.S. Senate to Vote on IRS Broker Rule This Week: Report image 0

Key Takeaways:

The Senate is reviewing an IRS rule that designates decentralized finance operators as brokers.
Lawmakers contend the mandate misinterprets blockchain technology, risking a stifling effect on crypto progress.
A congressional move may reverse the rule, reshaping crypto tax reporting standards.
The decision could redefine regulatory practices and influence the future of digital asset innovation.

A CoinDesk report published on Monday states that the U.S. Senate is expected to vote this week on whether to reverse an Internal Revenue Service (IRS) rule finalized in December 2024, which classifies certain DeFi participants as brokers.

Will The IRS’s DeFi Broker Rule Be Overturned?

A source familiar with the Senate schedule told CoinDesk that the IRS rule treating DeFi participants as brokers could be overturned this week.

1/ @SenTedCruz ’s CRA resolution to roll back the DeFi Broker Rule – anti-crypto, anti-privacy IRS midnight rulemaking – is critical to providing clarity for crypto and DeFi in the US.

Congress should vote YES on the CRA.

This has been a long battle… How did we get here? 👇
— Kristin Smith (@KMSmithDC) February 12, 2025

News of the vote follows a joint resolution introduced earlier this year by Senator Ted Cruz (R-TX) and Representative Mike Carey (R-OH) under the Congressional Review Act (CRA).

The resolution seeks to overturn the IRS regulation titled “ Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales .”

Details about the vote remain limited, but it represents an effort by lawmakers and industry figures to challenge the IRS rule on DeFi broker classification.

“This regulation undermines the purpose of DeFi technology: to enable individuals to freely buy, sell, and exchange digital assets,” Cruz said in a January 2025 statement . “America’s goal should be to prioritize innovation, and this rule is the opposite.”

Senate Expected to Vote on CRA Resolution This Week

Multiple crypto industry groups have opposed the IRS rule, with The Blockchain Association leading a mid-February Congressional letter calling for its reversal.

“The DeFi broker rule, finalized in the waning days of the Biden administration, represents regulatory overreach that fundamentally misunderstands the technology it attempts to regulate and ignores Congress’s intent,” the crypto trade organization stated.

The Blockchain Association argues that the rule wrongly classifies technology infrastructure as financial intermediaries, while supporters contend that it is necessary for tax compliance.

For the resolution to take effect, it must pass both the House and the Senate before reaching the president’s desk for approval or veto.

The outcome could shape how DeFi is regulated in the U.S. going forward, with broader implications for the crypto industry.

Frequently Asked Questions (FAQs)

What global impact could result if the IRS rule is reversed?

Repealing the rule might encourage looser crypto oversight worldwide, prompting a more innovation-friendly stance while reshaping international compliance norms.

How might investor behavior shift with regulatory easing?

If regulations relax, investors may gain confidence and engage more actively, though some caution remains about potential gaps in tax oversight.

What long-term challenges could follow a regulatory rollback?

A repeal may spark debates over balancing innovation with tax transparency, as stakeholders work to protect investors while fostering a dynamic digital market.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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