The U.S. Senate’s recent decision to overturn an Internal Revenue Service rule regarding the reporting of digital asset sales has been met with both support and opposition. The resolution, passed under the Congressional Review Act, saw a 70-28 vote in favor, with Republicans leading the charge against the rule and some Democrats crossing party lines to support it.
Kristin Smith, CEO of the Blockchain Association, commended the bipartisan effort, noting the surprising number of Democrats who were willing to overturn a rule put in place during the Biden Administration. The resolution now awaits approval in the House before reaching President Trump’s desk for final confirmation.
The contested IRS rule, implemented in December 2024, expanded the definition of a “broker” to include decentralized finance protocols. Critics of the rule argued that it would impose unreasonable compliance requirements on decentralized financial systems, forcing DeFi protocols to register as traditional financial brokers and mandating that U.S. users link their on-chain addresses to their identities.
In response to the Senate’s decision, the DeFi Education Fund expressed optimism for the future of digital asset regulation in the United States. They praised the bipartisan support for pushing back against regulatory overreach, emphasizing the importance of protecting individuals’ freedom to choose how they transact and fostering American innovation.
The Trump administration officially endorsed the repeal effort, with Trump’s crypto policy chief, David Sacks, highlighting concerns over the rule’s potential impact on American innovation and privacy. Sacks criticized the rule as a last-minute regulation that would burden American DeFi companies with unprecedented compliance requirements.
As the debate continues, it is clear that the regulation of digital assets in the United States is entering a new chapter. The Senate’s decision marks a significant milestone in shaping the future of the crypto industry, with implications for innovation, privacy, and regulatory oversight.