Crypto Industry Asks Congress to Scrap IRS's DeFi Broker Rule

The crypto industry is urging Congress to overturn a tax rule implemented by the IRS during the previous administration. This rule requires certain participants in decentralized finance (DeFi), a sector of the crypto market, to collect and report data similar to traditional brokers. A resolution has been introduced by Senator Ted Cruz to repeal the rule using the Congressional Review Act. A letter signed by major crypto companies like Coinbase, Kraken, and Uniswap, along with venture capital firms and industry groups, supports this resolution, arguing the rule misunderstands DeFi technology and puts US companies at a disadvantage compared to foreign competitors. This could stifle innovation in the US. While the Congressional Review Act can permanently prevent similar rules from being reintroduced, it requires a majority vote in both houses of Congress and the President's signature. Other crypto advocacy groups are also working to prevent the rule's implementation. The Treasury Department has indicated that implementation of these rules for certain non-custodial players in the crypto space would be delayed to 2025.