Senate Moves to Revoke Controversial Crypto Tax Rule
In a significant victory for cryptocurrency advocates, a strong coalition of Democrats joined forces to support a U.S. Senate initiative aimed at abolishing a contentious crypto tax regulation implemented by the Biden administration. The Senate decisively voted 70-27 in favor of a resolution under the Congressional Review Act, which seeks to nullify the Internal Revenue Service’s (IRS) expanded broker rule that was poised to encompass decentralized finance (DeFi) platforms.
This legislative success marks a crucial step, although the House of Representatives must now follow suit with its own approval. Following this, it is anticipated that President Donald Trump will promptly sign the resolution into law. Once enacted, not only will this rule be eliminated, but the IRS will also be prohibited from instituting similar policies in the future.
Senator Ted Cruz, who sponsored the resolution, passionately addressed the Senate prior to the vote, describing DeFi as a “microcosm of the crypto revolution.” He criticized the federal government’s overreach, labeling the broker rule as “incoherent.” Cruz argued that the regulation unfairly targeted software developers as brokers, mandating them to disclose user data and personal information, which he contended was nonsensical given that “their software never holds or controls user funds.”
The bipartisan support that propelled this effort to success mirrors previous votes in earlier sessions, such as the initiative to repeal the Securities and Exchange Commission’s crypto accounting rule. This trend reflects a growing bipartisan consensus on issues pertaining to digital assets, potentially paving the way for upcoming legislative initiatives focused on stablecoin regulations and market-structure laws that would place cryptocurrency under formal federal oversight.
Highlighting the evolving political landscape, Cruz noted that while more Republicans have historically backed crypto-related initiatives, the recent Democratic support signals a generational shift. He emphasized that younger members of Congress are more likely to champion these efforts than their older counterparts. “Let’s rescind this rule, and let’s unleash the future,” Cruz asserted.
Moreover, the House Financial Services Committee has already passed a corresponding resolution, recommending its approval for a vote on the House floor, which is anticipated soon. The White House has indicated that President Trump is likely to expedite the signing of the resolution, signaling a swift conclusion to this contentious regulatory chapter.
