Decentralized finance (DeFi) protocols might no longer report to American tax authorities after the US Senate repealed the IRS “broker” rule.
Many analysts believe that US President Donald Trump will issue a resolution in the upcoming weeks adopting the Senate’s legislative action and overturning the Biden-era policy on DeFi protocols.
Pro-DeFi Resolution Coming Soon?
Analysts suggest that Trump will be signing a resolution that would undo the rule implemented during the Biden administration that requires DeFi protocols to report to the US Internal Revenue Service (IRS).
It is a move seen by many market observers that will greatly benefit DeFi protocols and their users, repealing a policy that crypto players claimed was “unworkable.”
According to crypto analysts, the upcoming Trump resolution would signal a potential shift in the government’s stance on dealing with DeFi, which brings excitement to traders.
The following statement is attributed to Blockchain Association CEO @KMSmithDC following today’s second Senate vote to roll back the DeFi broker rule: pic.twitter.com/S632l8sFAb
— Blockchain Association (@BlockchainAssn) March 27, 2025
Senate’s Majority Decision
The US Senate announced that the majority of the American senators agreed to pass legislation that revokes the IRS DeFi broker rule.
On March 26, lawmakers in the US Senate voted 70-28 to pass a motion that will overturn the Biden rule on DeFi. With the passage of this landmark legislation, DeFi will no longer comply with the IRS reporting requirements.
1/🚨 New “Broker” CRA Milestone 🚨
With *another* bipartisan super majority of 70 Senators, Congress has repealed the IRS “broker” rule requiring DeFi front-ends to KYC users – ultimately reaffirming that Americans should have the freedom to decide how they transact. pic.twitter.com/AOZttE9Sio
— DeFi Education Fund (@fund_defi) March 27, 2025
“With *another* bipartisan super majority of 70 Senators, Congress has repealed the IRS “broker” rule requiring DeFi front-ends to KYC users – ultimately reaffirming that Americans should have the freedom to decide how they transact,” DeFi Education Fund said in a post.
US Lawmakers Hailed
DeFi Education Fund lauded American lawmakers for passing this landmark legislation for the crypto sector, praising all members who voted in favor of the resolution. “We also thank Senator Ted Cruz and Representative Mike Carey for their leadership.”
As of today, the market cap of cryptocurrencies stood at $2.6 trillion. Chart: TradingView
“Next up? The CRA heads to @realDonaldTrump for signature – a milestone that would officially roll back the IRS’ misguided “DeFi Broker” rulemaking, and formally protect DeFi innovators in the United States,” DeFi Education Fund added.
White House’s AI and crypto czar, David Sacks, said that Trump is in favor of revoking the IRS DeFi broker rule.
Blockchain Association CEO Kristin Smith hailed the Senate for the passage, adding that their group is looking forward to ” taking this harmful rule off the books for good.”
However, Democratic Rep. Lloyd Doggett opposed the resolution, arguing that it is a “special interest exemption” from IRS disclosures. Doggett added that it will make tax evasion and money laundering so much easier for wealthy Republican donors who have been using these decentralized exchanges.
According to the Democrat legislator, it will create a “loophole that would be exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
Featured image from Gemini Imagen, chart from TradingView
