The US Senate May Overturn IRS Rule Imposing Increased Tax Obligations on DeFi Platforms
The US Senate could vote this week to repeal a rule by the Internal Revenue Service (IRS) that is considered particularly threatening to decentralized finance (DeFi). This measure, passed last December, imposes increased tax reporting requirements on DeFi actors, categorizing them as traditional brokers. Faced with this regulatory offensive, several Republican senators, including Ted Cruz, have invoked the Congressional Review Act (CRA) to quickly repeal it.
At the same time, another federal regulation targeting major tech companies offering digital wallets and payment services, issued by the Consumer Financial Protection Bureau (CFPB), is also in the Senate’s crosshairs. This dual legislative front is part of a broader effort to unravel certain regulations imposed under the Biden administration.
The Biden administration has done everything it can to stifle financial innovation in the United States, threatening to send digital asset management companies abroad. The Senate is working to remove these restrictive regulations one by one in order to restore the financial freedom of the American people.
Sentator John Thune
A Strategic Issue for the Crypto Ecosystem
The IRS justified its decision by arguing that extending tax obligations to DeFi platforms would improve transparency and tax collection on digital assets. But for industry players and their political supporters, this measure represents a direct threat to innovation in the United States. According to Senator John Thune, the fiscal policy of the Biden administration has created obstacles to the development of crypto companies in the country, prompting them to seek refuge abroad.
Ted Cruz, one of the leading voices of this initiative, has denounced a “last-minute attack on American innovation,” accusing the Biden administration of imposing excessive regulation on DeFi. He expresses confidence in Congress canceling the measure this week.
A Legislative Strategy Under Time Constraints
The Republican initiative relies on the Congressional Review Act, a mechanism that allows Congress to invalidate recent regulations under certain time constraints. This legislative lever, already used by Donald Trump during his first term, is a priority for the Republican camp to dismantle several regulations adopted by the Biden administration at the end of its term.
However, the repeal of these rules would require a positive vote from both houses of Congress and the president’s signature to take effect. The House of Representatives has already made progress on the issue, sending a resolution on the IRS rule to the Senate vote, which could accelerate the process.
A Broad Fight Against Big Tech Regulation
In parallel, the Senate also targets CFPB regulation on digital wallets and payment apps, which would impose similar obligations on giants like Apple, Amazon, and Google as those imposed on major American banks. According to Senator Pete Ricketts, this rule constitutes “an excessive bureaucratic response to a non-existent problem,” risking stifling innovation and harming job creators.
This Republican initiative is part of a broader struggle against the expansion of federal agency powers. The CFPB and the IRS, seen as overly intrusive regulatory instruments, are among the Senate’s top targets, with a Republican majority.
A Crypto Summit at the White House in the Background
As these debates stir in Washington, the White House plans to host a cryptocurrency summit on March 7, under the leadership of David Sacks, Trump’s “Crypto Czar.” This event will bring together founders, CEOs from the sector, and regulators to discuss the future of digital assets in the United States.
In this context of regulatory tensions, the Senate plays a key role in the future of DeFi and major digital companies, with an anticipated vote that could redefine the US regulatory landscape.
