The US Senate is set to vote on a resolution that could overturn a controversial IRS rule affecting the decentralized finance (DeFi) industry. This rule, finalized in December 2024, requires certain crypto operators to report tax information as brokers.
The rule in question is called the “Broker DeFi Rule,” and it’s been criticized for its potential to hinder growth in the DeFi sector.
Lawmakers, including Senator Ted Cruz, are pushing to rollback the rule, citing concerns that it could drive innovation overseas and harm American taxpayers.
David Sacks’ Endorsement
David Sacks, the White House Crypto and AI Czar, has publicly endorsed the rollback of this regulation, which is in line with lawmakers who view it as an overreach that threatens the growth of the cryptocurrency sector.
In a statement, David Sacks emphasized that the IRS regulation indicates the core purpose of DeFi technologies, which is to facilitate free and open exchanges of digital assets without excessive regulatory burdens.
Legislative Support from Key Lawmakers
Senator Ted Cruz introduced the resolution under the Congressional Review Act (CRA), aiming to nullify the IRS rule.
Cruz has been vocal about the detrimental effects of such regulations, asserting that they hinder financial innovation and risk pushing digital asset companies overseas.
Alongside Cruz’s efforts, Majority Leader John Thune expressed strong support for dismantling what he termed “onerous regulations” that inhibit American financial liberty.
Implications for the Crypto Industry
The upcoming Senate vote represents a critical moment for the crypto industry, as it seeks to redefine regulatory practices surrounding digital assets. If successful, this resolution could pave the way for a more favorable regulatory environment, encouraging investment and innovation in blockchain technology.
As discussions unfold in the Senate, stakeholders in the crypto community are looking forward for further development in this matter and are hopeful for a legislative outcome that prioritizes innovation while addressing necessary tax compliance measures.
The voting is expected to take place shortly, with implications that could resonate throughout the digital asset landscape for years to come.
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