U.S. Senate to Vote on IRS Broker Rule This Week: Report

Last updated:

Author

Julia Smith

Author

Julia Smith

About Author

Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

Last updated:

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas – from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

U.S. Senate, DeFi broker, IRS

Key Takeaways:

  • The Senate is reviewing an IRS rule that designates decentralized finance operators as brokers.
  • Lawmakers contend the mandate misinterprets blockchain technology, risking a stifling effect on crypto progress.
  • A congressional move may reverse the rule, reshaping crypto tax reporting standards.
  • The decision could redefine regulatory practices and influence the future of digital asset innovation.

A CoinDesk report published on Monday states that the U.S. Senate is expected to vote this week on whether to reverse an Internal Revenue Service (IRS) rule finalized in December 2024, which classifies certain DeFi participants as brokers.

Will The IRS’s DeFi Broker Rule Be Overturned?

A source familiar with the Senate schedule told CoinDesk that the IRS rule treating DeFi participants as brokers could be overturned this week.

News of the vote follows a joint resolution introduced earlier this year by Senator Ted Cruz (R-TX) and Representative Mike Carey (R-OH) under the Congressional Review Act (CRA).

The resolution seeks to overturn the IRS regulation titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales.”

Details about the vote remain limited, but it represents an effort by lawmakers and industry figures to challenge the IRS rule on DeFi broker classification.

“This regulation undermines the purpose of DeFi technology: to enable individuals to freely buy, sell, and exchange digital assets,” Cruz said in a January 2025 statement. “America’s goal should be to prioritize innovation, and this rule is the opposite.”

Senate Expected to Vote on CRA Resolution This Week

Multiple crypto industry groups have opposed the IRS rule, with The Blockchain Association leading a mid-February Congressional letter calling for its reversal.

“The DeFi broker rule, finalized in the waning days of the Biden administration, represents regulatory overreach that fundamentally misunderstands the technology it attempts to regulate and ignores Congress’s intent,” the crypto trade organization stated.

The Blockchain Association argues that the rule wrongly classifies technology infrastructure as financial intermediaries, while supporters contend that it is necessary for tax compliance.

For the resolution to take effect, it must pass both the House and the Senate before reaching the president’s desk for approval or veto.

The outcome could shape how DeFi is regulated in the U.S. going forward, with broader implications for the crypto industry.

Frequently Asked Questions (FAQs)

What global impact could result if the IRS rule is reversed?

Repealing the rule might encourage looser crypto oversight worldwide, prompting a more innovation-friendly stance while reshaping international compliance norms.

How might investor behavior shift with regulatory easing?

If regulations relax, investors may gain confidence and engage more actively, though some caution remains about potential gaps in tax oversight.

What long-term challenges could follow a regulatory rollback?

A repeal may spark debates over balancing innovation with tax transparency, as stakeholders work to protect investors while fostering a dynamic digital market.

You May Also Like