On April 10, US President Donald Trump signed a joint congressional resolution. This new law would largely accomplish the goal of reversing the IRS’s wildly unpopular DeFi broker rule. This move, if made permanent, would commensurately prevent the Treasury Department from implementing expansive reporting requirements for DeFi platforms and services. Those standards were scheduled to take effect starting in 2027.
The rescinded rule would have compelled DeFi platforms to disclose gross proceeds from cryptocurrency sales and provide information regarding taxpayers involved in these transactions. Consumer advocates warned that the rule would dump burdensome regulations on decentralized platforms. They fear this might chill innovation in the crypto and DeFi spaces.
The Senate passed the resolution on March 26, after the House had passed its own version on March 11. The House Ways and Means Committee had moved the resolution previously on February 25.
In December, the Blockchain Association, a prominent industry group, filed a lawsuit against the IRS and the Treasury. To do this, they first set their sights on a controversial IRS rule that had landed on their radar. The association argued not only that the rule was illegal, but that it was an “unconstitutional overreach.”
"This rule promised an end to the United States crypto industry; it was a sledgehammer to the engine of American innovation," - Kristin Smith, CEO of the Blockchain Association
Representative Mike Carey had previously called the resolution a “landmark achievement”. Flake further noted that it represents the first time a cryptocurrency-related bill has been enacted into law.
“The DeFi Broker Rule needlessly hindered American innovation, infringed on the privacy of everyday Americans, and was set to overwhelm the IRS with an overflow of new filings that it doesn’t have the infrastructure to handle during tax season,” - Mike Carey
Proponents of the IRS rule, including Democratic Rep. Lloyd Doggett, spoke out against their concerns. These advocates assert that without the rule, wealthy tax evaders would gain free rein to abuse loopholes.
