The Senate voted 70-28 on Wednesday in support of a House resolution to knock down a Biden-era rule previously pushed by the IRS that would have required decentralized finance platforms to collect and report taxpayer information.

Critics argued the rule was "fundamentally unworkable" because DeFi platforms operate through automated code on blockchains without human intervention or visibility into user identities.

Efforts to repeal and revise the IRS ruling emerged in January, with the U.S. House of Representatives signaling consideration by February.

A week later, the Trump administration threw its weight behind those efforts, leading to a move from the Senate to overturn it on March 4.

However, readings of the Congressional were restarted due to a "blue slip" issue where the House cited constitutional concerns over how budget matters are handled, arguing that the repeal should have started with the House.

A parallel version of the resolution was later passed by Congress earlier this month with a 292-132 bipartisan turnout.

It's now making its way to the White House, where President Donald Trump is expected to sign.

Critical concerns

Earlier this month, U.S. Treasury Secretary Scott Bessent said that his office is looking to work closely with the IRS and Office of the Comptroller of the Currency (OCC) to "rescind and amend" related crypto tax rules that impacted how crypto and digital asset firms do business in the country.

Concerns over the IRS broker rule point to its language about "DeFi brokers" as "front-end service providers" for digital asset transactions.

Issues over how the rule unnecessarily extended these definitions were condemned by Commissioner Hester Pierce in February last year as something that would be "harming" market participants who have unwittingly found themselves “transformed into dealers."

By April of the same year, crypto lobbyists sued the then-Gensler-led SEC at the time over broad language on and definitions of what constitutes operating as a "dealer," with the DeFi Education Fund warning months later that the requirements would "push this entire, burgeoning technology offshore."

Edited by Sebastian Sinclair