The U.S. Senate voted to repeal the IRS requirement for DeFi platforms to report transactions. This decision is seen as support for the crypto industry by Donald Trump's White House.
Context and Significance of the IRS Rule
The rule, enacted in December 2024, required platforms handling crypto transactions to collect and submit user data to the IRS. The IRS argued it was necessary to close tax gaps. However, industry representatives, including the Blockchain Association and firms like Coinbase and Uniswap, argued that the rule misapplied traditional broker definitions to non-custodial platforms and automated market makers.
Resolution Movement and Legislative Process
The resolution, introduced by Senator Ted Cruz, proceeds to the House of Representatives for further consideration. Under the Congressional Review Act (CRA), congressional repeal bars the IRS from reissuing a similar rule without statutory authorization. The House is expected to support the resolution due to bipartisan backing.
Market Reaction and Forecasts
Kristin Smith of the Blockchain Association called the Senate vote a 'decisive win for DeFi,' citing bipartisan consensus against overreach. The IRS projected a $3.9 billion revenue loss over ten years if the rule is revoked. Supporters of repeal argue the rule's broad scope exceeded practical enforcement, while detractors warn of reduced tax enforcement mechanisms.
The repeal of the IRS rule for DeFi reflects the Trump White House's policy of promoting crypto innovation in the U.S. Discussions on the current regulatory course will continue at the upcoming crypto summit.
