Senate Overturns IRS Crypto Rule in Bipartisan 70-27 Vote

The U.S. Senate has voted to overturn a controversial Internal Revenue Service (IRS) rule that required brokers to report gross proceeds from digital asset sales. The resolution, introduced under the Congressional Review Act, passed with a significant majority of 70-27, with bipartisan support from both Republicans and Democrats.

The IRS rule, finalized in December 2024 during the final weeks of the Biden administration, expanded the definition of a "broker" to include decentralized finance (DeFi) protocols. Industry critics argued that the measure would impose impossible compliance burdens on permissionless financial systems, force DeFi protocols to register as traditional financial brokers, and require all U.S. DeFi users to tie their on-chain addresses to their identities.

The Trump administration formally backed the repeal effort on Tuesday, with David Sacks, Trump's crypto policy chief, stating that the White House "strongly supports" the resolution. Sacks argued that the rule would stifle American innovation, raise privacy concerns, and impose an unprecedented compliance burden on American DeFi companies.

The Blockchain Association, a Washington-based crypto lobbying group, expressed surprise at the number of Democrats willing to overturn a rule issued in the Biden Administration. Kristin Smith, CEO of the association, described the vote as "absolutely mind-blowing."

The DeFi Education Fund, another D.C.-based crypto lobbying group, applauded the bipartisan supermajority of Senators who recognized the need to push back against regulatory overreach to protect Americans' freedom to choose how they transact and American innovation.

The resolution now awaits a parallel version to advance in the House, which must pass a floor vote before heading to Trump's desk for final approval. If enacted, this would mark a significant victory for the crypto industry and President Trump's administration.