Source: cryptoslate
Compiled by: Blockchain Knight
U.S. lawmakers are preparing a Congressional Review Act (CRA) to challenge the Internal Revenue Service’s (IRS) broker rules that require DeFi participants to report user data to the IRS.
Fox Business reporter Eleanor Terrett revealed on March 4 that Republican Senator Ted Cruz is leading the push to introduce the CRA. An initial vote was originally scheduled for March 5, but scheduling conflicts, including the upcoming State of the Union address, could delay the vote.
As Terrett reported: “The CRA, if passed by a simple majority in both the House and Senate, would repeal the IRS’s broker rule, which expands the definition of a ‘broker’ to include DeFi developers. Supporters of the CRA say the current rules are ill-suited to the unique nature of DeFi.”
The IRS broker-dealer rule was finalized last year and imposes new tax reporting requirements on entities that deal in digital assets.
The rule classifies brokers (including DeFi front ends) as entities responsible for tracking user activities, reporting transactions, and enforcing compliance measures. The rule also requires DeFi platforms to implement the Know Your Customer (KYC) process.
Furthermore, the regulation applies to all digital assets, including NFTs and stablecoins.
The White House supports the move, and Crypto Asset Affairs Director David Sacks issued a public statement on Tuesday, calling the "so-called broker DeFi rule a last-minute attack on the Crypto community by the Biden administration."
Peter Van Valkenburgh, executive director of crypto asset think tank Coin Center, criticized the rule for treating software developers and infrastructure providers as brokers.
He argued that enforcing such a measure would undermine privacy rights, ignore bipartisan concerns, and hinder technological progress.
In light of this, Valkenburgh stressed that the outcome of this vote will serve as an early indicator of how the U.S. government will approach digital asset regulation in the coming years.
“There has been talk that the new Congress will take a friendlier stance toward crypto assets; this vote will be the decisive first test of that theory,” he said.
At the same time, revoking the rule would align with Donald Trump’s administration’s broader pro-crypto stance and reinforce the growing influence of pro-crypto lawmakers.
