US 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 agency. Republican Senator Ted Cruz is leading efforts to introduce the CRA, according to Fox Business reporter Eleanor Terrett. The initial vote was scheduled for March 5, but there may be delays due to scheduling conflicts, including the upcoming State of the Union address.
If passed with a simple majority in both chambers, the CRA would repeal the US Treasury’s IRS broker rule, which expands the definition of a ‘broker’ to include DeFi developers. Advocates of the CRA argue that the current rule is not suitable for the unique nature of DeFi.
The IRS broker rule, finalized last year, imposes new tax reporting requirements on entities handling digital assets. It categorizes brokers, including DeFi front-ends, as responsible for tracking user activity, reporting transactions, and enforcing compliance measures. The rule also mandates that DeFi platforms implement Know Your Customer (KYC) processes. Furthermore, the regulation applies to all digital assets, including non-fungible tokens (NFTs) and stablecoins.
The White House has shown support for the move, with Crypto Tzar David Sacks publicly stating that the “so-called Broker DeFi Rule” is an 11th hour attack on the crypto community by the Biden administration.
Peter Van Valkenburgh, executive director of crypto think tank Coin Center, criticized the rule for treating software developers and infrastructure providers as brokers. He argues that enforcing such measures undermines privacy rights, disregards bipartisan concerns, and discourages technological progress. Valkenburgh emphasizes that the outcome of this vote will serve as an early indicator of the US government’s approach to digital asset regulation in the coming years.
Revoking the rule would align with the pro-crypto stance of the Donald Trump administration and reinforce the growing influence of pro-crypto lawmakers.
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3 Comments
This article provides a fascinating insight into the ongoing battle between US lawmakers and the White House over IRS regulations on DeFi reporting. It highlights the complexities of navigating the ever-evolving landscape of cryptocurrency and the need for clear guidelines. It will be interesting to see how this challenge unfolds and its potential impact on the decentralized finance industry. #DeFi #IRSregulations
It’s fascinating to see the collaboration between US lawmakers and the White House in taking on the IRS regulations in the DeFi space. This battle represents a significant step towards regulating and understanding the complexities of decentralized finance. I’m curious to see how these challenges will shape the future of the industry and its impact on individuals and institutions.
This article sheds light on an intriguing battle between US lawmakers and the White House against IRS regulations on DeFi reporting. It highlights the complexities of regulating decentralized finance and presents an opportunity for readers to express their opinions on the matter.