President Donald Trump’s crypto czar has officially endorsed legislation that would prevent the IRS from imposing strict reporting rules on decentralized finance projects—marking the first time the Trump administration has explicitly weighed in on pending crypto policy.
David SacksTrump’s crypto chief said that on Tuesday, the White House “strongly supports” Passage of a joint Congress Resolution This would overturn a controversial IRS rule from the Biden era that expanded the definition “broker” Included are most DeFi Projects
Many industry professionals believe that this rule is likely to eliminate DeFi as it will require permissionless protocols in order to meet the reporting requirements of Wall Street brokers.
“This rule, issued as a midnight regulation in the final days of the previous administration, would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies,” Sacks stated in a Statement.
Silicon Valley entrepreneur, added Trump’s advisors that in the event the House and Senate passed a Resolution to Undo the IRS Rule. They would then recommend for the President to sign the resolution into law.
Last week, a House committee voted to advance the measure to a full floor vote. In the Senate, Sen. Ted Cruz’s (R-TX), resolution has been co-sponsored by 13 Republicans. It would be necessary for the bill to pass with simple majority in both chambers before Trump could sign it into law.
Industry advocates say the IRS rule, as it currently stands, would be unfair to DeFi users and impossible to comply with for DeFi protocols. The IRS rule would force all American DeFi Users to link their on-chain address to their identity, which is a sensitive subject within the decentralized finance world.
It would also force permissionless DeFi protocols—automated systems run by smart contracts that in many cases do not involve human oversight—to register like brick-and-mortar Wall Street brokerage firms with traditional corporate leadership structures.
The crypto community hurried to express their gratitude to Sacks, the Trump Administration and others for doing all they could to prevent the IRS from implementing its new rules.
Coin Center in Washington, DC, is one of the organizations that applauded this announcement. Peter Van Valkenburgh, executive director of the group wrote just a day earlier that although “there has been much talk” The upcoming vote to overturn the IRS’s new broker rules will be a sign that American politicians are becoming more friendly towards crypto. “a decisive first test of that theory.”
Editor's note: This story was updated after publication with additional details.
Andrew Hayward is the editor
