The US Senate has passed a resolution to repeal a Biden-era rule that would require decentralized finance (DeFi) protocols to report to the Internal Revenue Service (IRS).
The Senate voted 70 to 27 on March 4 to approve a motion to repeal the rule that would expand existing IRS reporting requirements to include decentralized exchanges and require brokers to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.
The resolution now moves to the House, where it will need to be passed before being sent to President Donald Trump. The White House’s AI and crypto czar David Sacks has said Trump supports killing the rule.
The motion to repeal the IRS’ DeFi broker rule passed the Senate 70 to 27 on March 4. Source: US Senate
It follows a similar effort by House lawmakers, who advanced a resolution to repeal the rule on Feb. 26, which has yet to be voted on.
Eli Cohen, general counsel of the RWA tokenizing platform Centrifuge, said in a statement to Cointelegraph that the rule never made “any sense and was unworkable in practice.”
Still, given that it never went into force, all the requirements haven’t changed, he added.
“It just means that the taxpayer needs to report directly to the IRS without an intermediary taking on this obligation,” Cohen said.
Kristin Smith, CEO of the crypto advocacy group The Blockchain Association, said in a March 4 post on X that it was a big day for “DeFi – and the US crypto industry.”
“The effort to repeal this rule should be seen as part of a broader move to keep crypto in the US,” she said.
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“DeFi is an American strategic strength, and today’s action helps ensure it will continue to develop on home soil,” Smith added.
Smith said this is the most pro-crypto Congress to date, and the resolution passing through the Senate was the first time the sentiment had been converted into action.
“This bodes well for the efforts to design and pass stablecoin and market structure legislation,” Smith said.
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