Key Notes
- The US Senate is set to vote on an IRS rule requiring crypto brokers to report detailed transaction data, a move that has sparked controversy in the industry.
- Critics argue that the tax reporting mandate could stifle DeFi innovation, leading to legal challenges and calls for its repeal.
- Lawmakers will also review a separate Consumer Financial Protection Bureau (CFPB) regulation that affects digital payment apps.
The US Senate is preparing to vote on a controversial IRS regulation requiring “brokers” to report gross proceeds, cost basis, and gains or losses from digital asset transactions, including cryptocurrency, stablecoins, and non-fungible tokens (NFTs).
The law, formally introduced in December 2024 and enacted in January 2025, has faced strong opposition from the crypto community. Critics argue that the regulation threatens the growth and innovation of the decentralized finance (DeFi) sector, leading to a lawsuit challenging its implementation.
Lawmakers Push for Repeal
While the legal battle continues, Senator Ted Cruz, alongside Senators Cynthia Lummis, Pete Ricketts, and others, has taken legislative action to challenge the rule, according to a CoinDesk report on Monday, citing sources familiar with the matter.
The lawmakers have introduced a joint resolution urging the repeal of the IRS regulation. A source close to the matter revealed that Congress is expected to vote on the resolution this week, a decision that could determine the rule’s future.
The Congress has the power to challenge and potentially overturn unfavourable new laws enacted by government agencies under the Congressional Review Act (CRA).
In addition to the IRS measure, Congress is also set to review what CoinDesk described as an “11th-hour regulation” from the Consumer Financial Protection Bureau (CFPB), which impacts digital payment applications.
Donald Trump Finally Adds Crypto to National Reserve
The previous administration introduced both rules in an attempt to curb innovation within the crypto sector. In 2024, the then-US president signed an executive order directing the government to assess the risks and benefits of cryptocurrencies.
The measures targeted six key areas: consumer protection, financial stability, illicit activity, US competitiveness, financial inclusion, and responsible innovation. However, despite these efforts, the industry remained without clear regulatory guidance during his tenure.
In contrast, the current administration is taking steps to establish a well-defined regulatory framework for cryptocurrencies in the US. Last month, President Donald Trump issued an executive order instructing federal agencies to review existing laws and create a clear regulatory structure for digital assets and related services. Agencies such as the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) have been given 30 days, starting January 23, 2025, to carry out this directive.
Beyond regulatory reforms, Trump has pledged to position the US as the “world crypto capital,” aiming to lead in regulation, innovation, and technological advancements within the sector.
On Sunday, Trump officially unveiled the long-anticipated crypto reserve, incorporating major digital assets like XRP, SOL, and ADA. He emphasized that Bitcoin and Ethereum would be the “heart of the reserve,” reaffirming his strong support for the top two cryptocurrencies.
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