White House Takes Stand Against IRS DeFi Broker Rule—Crypto Win?

• The White House supports repealing the IRS DeFi Broker Rule, easing burdens on DeFi developers and crypto platforms.
• The vote’s outcome could influence future U.S. crypto regulations and the market’s response to decentralized finance policies.

The White House has recently expressed support for a Congressional Review Act (CRA) resolution aimed at overturning the IRS’s broker rule for decentralized finance (DeFi). This follows discussions at Trump’s White House Summit, where the possibility of a zero crypto tax policy was explored, as highlighted by CNF.

In a tweet by David Sacks, the White House’s advisor on Crypto and AI confirmed the administration’s backing of the CRA, emphasizing that the rule imposes undue reporting obligations on DeFi developers and infrastructure providers.

The White House is pleased to announce its support for the CRA introduced by @SenTedCruz and @RepMikeCarey to rescind the so-called Broker DeFi Rule, an 11th hour attack on the crypto community by the Biden administration. pic.twitter.com/T7Hxasb4aC

— David Sacks (@davidsacks47) March 4, 2025

White House and Legislative Pushback

The IRS rule, finalized in 2024, expanded the definition of a broker to include DeFi developers, requiring them to report user transaction data to the IRS.

Senator Ted Cruz and Representative Mike Carey introduced the CRA resolution, arguing that DeFi developers should not be classified as brokers under existing tax laws, as they do not directly facilitate transactions between buyers and sellers.

Critics believe this rule could stifle innovation in the digital asset sector. Peter Van Valkenburgh, Executive Director of Coin Center, stated that such requirements could hinder technological progress, discouraging blockchain development in the U.S.

Senate Vote and Potential Implications—Crypto Win?

The Senate is set to vote on the CRA resolution to repeal the IRS DeFi Broker Rule. Originally scheduled for March 5, the vote may be delayed due to the State of the Union address. If approved by both chambers, the resolution would overturn the IRS regulation.

The Statement of Administration Policy highlights concerns, stating:

This rule expands the definition of the term ‘broker’ to include software that allows users to access decentralized finance (DeFi) protocols, which inappropriately requires certain DeFi participants to report gross proceeds from cryptocurrency sales and other digital asset transactions, including data about the taxpayers involved.

Supporters argue that the broker classification is overly broad, targeting software developers and platform operators who do not control user funds, potentially driving innovation outside the United States.

Technology experts warn that compliance could be impractical for decentralized platforms lacking a central authority managing user accounts.

The CRA resolution’s outcome will be a key indicator of the U.S. government’s stance on digital asset regulation. A successful repeal of the IRS rule could set a precedent for more pro-crypto policies.

Impact on Major Cryptocurrencies

In a related CNF report, President Trump announced the creation of a U.S. strategic reserve of cryptocurrencies, including Bitcoin, Ethereum, XRP, Solana, and Cardano. This announcement triggered strong market reactions, with Bitcoin (BTC) surging 4.06% in the past day to $86,959.