US legislators are drafting a Congressional Review Act (CRA) to counter the Internal Revenue Service’s (IRS) broker rules, which require DeFi players to share user information with the agency.
Republican Senator Ted Cruz is spearheading the push to file the CRA, which would reverse the IRS rule. The first vote was scheduled for March 5, but scheduling issues, such as the State of the Union address, could postpone proceedings.
The IRS broker rule, finalized last year, expands the definition of a “broker” to include DeFi developers and front-end platforms.
This means such platforms have to monitor user actions, report the transactions, and implement Know Your Customer (KYC) procedures. The rule covers all digital assets, which include non-fungible tokens (NFTs) and stablecoins.
Critics argue that this is an overreach, unfairly burdening software developers. Crypto Tzar David Sacks called the rule “an 11th-hour attack on the crypto community by the Biden administration.”
The CRA, officially known as S.J. Res. 3, requires a simple majority in both the House and Senate to pass. If successful, it would repeal the IRS rule and prevent similar regulations in the future.
The White House has strongly supported the CRA, stating that the IRS rule “stifles innovation and raises privacy concerns” while placing an excessive compliance burden on American DeFi companies. The administration also criticized the rule as a last-minute move by the previous government that could harm the crypto industry.
If the CRA is approved, it would be in line with the overall pro-crypto position of the Donald Trump administration and bolster the power of lawmakers who are pro-digital assets. The result of this vote will determine the tone for how the US government will regulate cryptocurrency over the next few years.
Also Read: U.S. Senate to Vote on Reversing IRS Crypto Rule Affecting DeFi
