Trump Backs Cruz-Carey Resolution to Block IRS DeFi Rule

The Trump administration has thrown its weight behind a joint resolution aimed at reversing an IRS rule that imposes extensive disclosure requirements on decentralized finance (DeFi) projects. The resolution, introduced by Senator Ted Cruz and Representative Mike Carey, seeks to repeal the IRS' "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales" rule.

The rule, issued in December, expands the definition of "broker" to include software that processes DeFi transactions. This would require DeFi projects to report gross proceeds from crypto sales and collect taxpayer data, including identities and transaction histories. The crypto industry has strongly opposed the rule, with the Blockchain Association criticizing it as a misinterpretation of DeFi technology and a threat to innovation.

The White House has expressed its support for the resolution, known as S.J. Res. 3, stating that it aims to prevent the implementation of burdensome information reporting requirements on DeFi participants. The administration has also raised concerns about privacy and the sharing of taxpayer personal information, as well as supporting innovation in the American digital asset industry.

The White House indicated that if Congress passes the resolution, the President's senior advisors would strongly recommend signing it into law. Meanwhile, the US Senate is set to vote this week on overturning two Biden-era regulations related to digital assets, including the DeFi rule.