A rule to scrap a U.S. Internal Revenue Service rule targeting decentralized finance platforms has cleared the Senate, setting the stage for the president’s expected sign-off.
On March 26, the Senate voted 70-28 in favour of repealing the controversial DeFi broker rule, which sought to expand tax reporting requirements for businesses in the sector.
Earlier this month, the House of Representatives passed the resolution with bipartisan support, with Republican Representative Mike Carey, a vocal critic of the bill, calling it a “massive government overreach” that would compromise the privacy of American nationals and hinder growth in the industry.
Now, the resolution heads to President Donald Trump’s desk for final approval. David Sacks, the White House’s crypto and AI adviser, has previously confirmed the administration’s support, and Trump is expected to sign it into law.
The rules, initially proposed by the IRS and the United States Treasury Department in August and finalised in December 2024, would require DeFi platforms to report user transactions—specifically, gross proceeds from crypto sales—to the IRS, similar to traditional brokers.
This would include collecting and filing personal data of users involved in these transactions, which critics say goes against the nature of decentralisation and puts unnecessary pressure on platforms that often don’t have central operators.
Supporters of the repeal argued that the rule was unworkable in practice and could drive innovation out of the U.S.
The Blockchain Association, a digital asset advocacy group, along with the Texas Blockchain Council, sued the IRS last year.
Marisa Coppel, the association’s Head of Legal, criticized regulators in a joint statement last year, claiming that the IRS and Treasury had “gone beyond their statutory authority in expanding the definition of ‘broker.”
“Not only is this an infringement on the privacy rights of individuals using decentralized technology, it would push this entire, burgeoning technology offshore,” he added.
