The U.S. Senate has voted 70-27 to overturn an Internal Revenue Service (IRS) rule that would have imposed new reporting requirements on decentralized finance (DeFi) brokers. The motion, presented by Senator Ted Cruz, was approved under the Congressional Review Act on March 4, signaling strong bipartisan opposition to the Biden-era regulation.
IRS DeFi Rule Faces Strong Opposition
Introduced in December, the IRS rule sought to expand the definition of “brokers” to include DeFi platforms, requiring them to report user data for tax compliance. However, critics argued that decentralized platforms do not operate like traditional financial institutions, making compliance with such regulations impractical. The digital asset think tank Coin Center even labeled the proposal as “technologically unfeasible.”
Senate Majority Leader John Thune (R-S.D.) emphasized the Senate’s stance against what he described as burdensome regulations. “The Biden administration did everything it could to stifle financial innovation in the United States,” Thune stated. “The Senate is working to undo these burdensome regulations one at a time to restore financial freedom for the American people.”
Next Steps: Awaiting House Approval and Presidential Signature
While the Senate has overturned the rule, the resolution must still pass the House of Representatives before it can be delivered to President Donald Trump for final approval. If signed into law, the IRS would not only be prohibited from enforcing this rule but also from implementing similar policies in the future.
The House Financial Services Committee has already approved a matching resolution, with a final floor vote pending. The White House has indicated that President Trump is expected to sign the bill into law as soon as possible.
Industry and Regulatory Implications
Crypto industry advocates welcomed the Senate’s decision. The Blockchain Association, which represents major cryptocurrency firms such as Coinbase, Kraken, and Uniswap Labs, praised the move, stating that it would prevent unnecessary restrictions on DeFi innovation. Similarly, the DeFi Education Fund described the vote as a “historic milestone” in the regulation of digital assets in the U.S.
This vote follows previous attempts to roll back Securities and Exchange Commission (SEC) accounting standards for digital assets and highlights the ongoing bipartisan trend of crypto-related legislative reforms. The Senate’s decision could pave the way for broader regulatory changes, as stablecoin and cryptocurrency market structure legislation remain key issues on the legislative agenda.
With the House vote still pending, all eyes are on Congress as the U.S. moves toward defining its regulatory stance on decentralized finance and digital assets.
