2025-03-27
The U.S. Senate voted 70-28 on March 26,
2025 to repeal a controversial IRS rule that would have required certain
decentralized finance (DeFi) platforms to report user trading activity and
issue 1099 tax forms.
The rule, finalized in late December
during the final days of the Biden administration, faced strong backlash from
the crypto industry, which argued it was vague, overreaching, and a threat to
privacy and innovation.
Introduced by Senator Ted Cruz from
Texas and Representative Mike Carey from Ohio introduced a joint resolution to
repeal an IRS rule finalized in late December during the final days of Biden’s
presidency.
The repeal measure previously passed
both chambers of Congress but required a final Senate vote due to its budgetary
implications.
It now heads to President Donald
Trump’s desk. White House crypto advisor David Sacks said Trump is expected to
sign the resolution, making it the first crypto-related bill to become law
under his administration.
The rule targeted “front-end” providers
of DeFi protocols—such as websites and interfaces that directly interact with
users—and would have treated them like traditional securities brokers.
Crypto advocates, including the DeFi
Education Fund, warned the regulation could stifle innovation and drive U.S.
developers offshore. The group sued the IRS over the rule earlier this year.
Amanda Tuminelli, executive director of
the DeFi Education Fund, praised the Senate’s vote as a “crucial step” to
protect U.S. innovation.
The resolution passed with some
bipartisan support, including from Senate Minority Leader Chuck Schumer, though
most backing came from Republicans. Some Democrats opposed the move, accusing
Republicans of using the vote to undermine the IRS.
