- The White House opposes the IRS rule expanding the broker definition to DeFi platforms, citing privacy and compliance concerns.
- S.J. Res. 3, introduced by Senator Ted Cruz and Representative Mike Carey, seeks to nullify the regulation through the Congressional Review Act.
- The Senate will vote on resolutions addressing DeFi reporting and tech firm regulations, with the White House signaling support for overturning both.
The White House has announced its support for S.J. Res. 3, a resolution introduced by Senator Ted Cruz (R-TX) and Representative Mike Carey (R-OH) to revoke an IRS rule that broadens the definition of a broker in cryptocurrency transactions. The rule, finalized on December 30, 2024, expands reporting requirements to decentralized finance (DeFi) software providers.
In a Statement of Administration Policy released on March 4, 2025, the White House indicated that the rule threatens financial innovation and raises privacy concerns. The administration emphasized that the regulation imposes excessive compliance burdens on DeFi companies and software developers who do not directly facilitate transactions.
If Congress passed the resolution, the White House confirmed that senior advisors would recommend the President sign it into law, nullifying the IRS regulation.
IRS Rule Expands Broker Definition to DeFi Platforms
The IRS rule, titled “Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales,” mandates that entities facilitating cryptocurrency transactions collect and report taxpayer information, including identities and transaction histories. According to the enforcement requirement, all DeFi software providers and protocols that enable digital asset transactions would become classified as brokers subject to intense disclosure obligations.
The cryptocurrency industry opposes this regulation because it incorrectly defines DeFi operations and requires decentralized protocols to fulfill impossible reporting requirements. The requirement that DeFi projects gather user data confronts the systems’ decentralized nature while threatening user privacy and making compliance difficult to achieve.
Congress Moves to Overturn IRS Rule
The United States Senate plans to vote S.J. Res. 3 this week as part of a Congressional Review Act (CRA) attempt to overturn the IRS rule. Through its CRA function Congress can undo government regulations that were issued recently through a basic majority vote.
Congress intends to vote simultaneously on two measures: the first targets the IRS rule through S.J. Res. 3 and the second aims to cancel the CFPB regulation that affects how big technology companies handle consumer payment transactions through digital platforms. This provision works to maintain technological companies beyond standard regulatory oversight of major financial organizations.
The White House support for S.J. Res. 3 shows a new direction in policy that demonstrates its dedication to develop digital asset innovation while solving regulatory issues. The administration positions its approval by recognizing how it strikes a balance between monitoring and economic development to protect young technologies from burdensome regulations.
Both chambers of Congress will need to approve the resolutions before the President decides whether to issue his final authorization on this significant digital asset financial technology regulation.
