Blockchain Association Urges Lawmakers to Repeal "DeFi Broker" Rule

The Blockchain Association, a prominent advocacy group, has once again raised concerns about a proposed rule that could potentially stifle innovation in the decentralized finance (DeFi) sector. In a letter addressed to key lawmakers on Capitol Hill, the association warned that the expansion of the "broker" definition to include software that allows users to access DeFi protocols could have severe consequences for the industry.

The association argues that this rule, finalized under the Biden administration, inappropriately and unlawfully misclassifies technology infrastructure as intermediaries. This would force software companies that never take custody of users' assets to nonetheless collect and report users' personal information and transaction details to the government.

The Blockchain Association is calling for lawmakers to vote "yes" on Sen. Ted Cruz's Congressional Review Act (CRA) resolution to repeal the so-called DeFi broker rule. Kristin Smith, a spokesperson for the association, reminded us that this battle has been ongoing for some time, with the IRS initially seeking to implement this new definition in 2023.

The association's members are set to discuss the CRA resolution with Congressional offices in Washington D.C. on Feb. 26. However, the exact timing of a vote remains unclear. The latest letter from the association emphasizes that policy decisions with such severe consequences should be made deliberately, not accidentally through ill-conceived midnight rulemaking.