The US House and Senate voted to overturn the controversial IRS disclosure requirements for certain crypto brokers, relieving excessive burdens on digital asset transactions.
On March 11, the US House of Representatives approved a resolution to overturn the Biden Administration’s controversial “Broker Rule.”
Resolution Approved to Overturn “Broker Rule”
The US House of Representatives voted 292-132 to approve H.J Res. 25, aiming to overturn the controversial Biden Administration “Broker Rule.” The resolution seeks to eliminate an Internal Revenue Service (IRS) regulation that requires certain brokers, including DeFi entities, to report transaction details.
Bloomberg Law reports that the bipartisan vote seeks to relieve decentralized crypto exchanges from reporting sales, proceeds, and transaction details, explaining that the rule is “burdensome for business.”
The bipartisan vote followed a Senate resolution to overturn an IRS rule that classified DeFi software developers as “brokers.” On March 4, the S.J. Res.28, led by Senator Ted Cruz (R-TX), passed by an overwhelming bipartisan majority, 70-28.
The resolution was co-sponsored by Sens. Cynthia Lummis (R-Wyo.), Thom Tillis (R-N.C.), Tim Sheehy (R-Utah), and Ted Budd (R-N.C.). Rep. Carey introduced the joint resolution in the House of Representatives.
The IRS rule in question expanded the definition of “broker” to include DeFi protocols, requiring certain brokers to report the gross proceeds from digital asset sales. In a press release issued by Senator Cruz’s office, he said:
“Last night’s vote was a victory for American innovation. In a midnight move, the Biden administration attempted to undermine American privacy and impose burdensome regulations on digital currency. Yesterday, an overwhelming bipartisan majority voted in support of my legislation to rescind this harmful regulation.”
Significant Win for Digital Assets
According to critics, the controversial “Broker Rule” opposed excessive burdens on digital asset transactions and stifled innovation within the sector. The press release from Cruz’s office explained the Broker Rule “defined those developers as “brokers,” even though they did not touch any of the cryptocurrency being exchanged.”
Proponents of the resolutions argue the rule imposes unnecessary compliance costs and suppresses crypto development, threatening to drive such development offshore. Following the March 5 win, House Financial Services Committee Chairman French Hill (R-AR) shared his support of the decision:
“The previous Administration’s controversial ‘Broker Rule’ is a clear example of government overreach that threatens to push American digital asset development overseas. I was proud to protect America’s leadership in the digital asset ecosystem and vote to overturn this harmful, anti-innovation midnight rulemaking.”
Kristin Smith, CEO of Blockchain Association, an NPO dedicated to promoting a pro-innovation policy environment for the digital asset economy, commented:
“Today’s a bright day for DeFi – and all of crypto – in the United States. An incredible showing of bipartisan support passed Senator Ted Cruz’s Congressional Review Act resolution to roll back the DeFi-killing broker rule out of the Senate. It’s a hopeful sign that shows there is true bipartisan agreement in Washington that the American crypto industry deserves the freedom to grow and innovate here in the United States.”
While President Donald Trump must sign the resolution to become law, the White House will likely support the measure as it aligns with the Administration’s broader strategy to foster innovation in the digital asset sector.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.