US lawmakers supported by White House to challenge IRS rules on DeFi reporting
US lawmakers are preparing a Congressional Review Act (CRA) that will challenge the Internal Revenue Services (IRS) broker rules, which require DeFi participants to report user data to the agency.
Fox Business reporter Eleanor Terrett revealed on March 4 that Republican Senator Ted Cruz is leading efforts to introduce the CRA. The initial vote was set for March 5, but scheduling conflicts, including the upcoming State of the Union address, may cause delays.
According to Terrett:
This CRA, if passed with a simple majority in both chambers, would repeal the US Treasurys IRS broker rule which expands the definition of a broker to include DeFi developers. Advocates of the CRA say the rule, as it stands, is not suited to the unique nature of DeFi.
The IRS broker rule, finalized last year, imposes new tax reporting requirements on entities handling digital assets.
It classifies brokersincluding DeFi front-endsas responsible for tracking user activity, reporting transactions, and enforcing compliance measures. The rule also mandates DeFi platforms implement Know Your Customer (KYC) processes.
Additionally, the regulation applies to all digital assets, including non-fungible tokens (NFTs) and stablecoins.
The White House supported the move, with Crypto Tzar David Sacks making a public statement on Tuesday calling the so-called Broker DeFi Rule, an 11th hour attack on the crypto community by the Biden administration.
Peter Van Valkenburgh, executive director of crypto think tank Coin Center, criticized the rule for treating software developers and infrastructure providers as brokers.
He argued that enforcing such measures undermines privacy rights, disregards bipartisan concerns, and discourages technological progress.
Considering this, Valkenburgh emphasized that the outcome of this vote will serve as an early indicator of the US governments approach to digital asset regulation in the coming years.
According to him:
There has been much talk of the new Congress taking a friendlier stance toward crypto; this vote will be a decisive first test of that theory.
Meanwhile, revoking the rule would align with the broader pro-crypto stance of the Donald Trump administration and reinforce the growing influence of pro-crypto lawmakers.
The post US lawmakers supported by White House to challenge IRS rules on DeFi reporting appeared first on CryptoSlate.
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Text source: CryptoSlate
