The resolution, known as S.J. Res. 3, was introduced on January 21 by Senator Ted Cruz and Representative Mike Carey, and aims to repeal the rule requiring digital asset brokers to report gross proceeds from sales.
The rule, which was passed last December, expands the definition of “broker” to include protocols and applications that process decentralized finance transactions.
Under the expansion, DeFi projects will be required to collect taxpayer data, including identities and transaction histories, and submit it to the IRS.
The rule has been widely opposed by the cryptocurrency industry, with the Blockchain Association calling it a misinterpretation of the nature of DeFi technology and a direct threat to innovation in the sector.
For its part, Senator Cruz’s proposal seeks to prevent the implementation of these strict requirements, in order to protect user privacy and reduce the regulatory compliance burden on US DeFi projects.
In an official statement, the White House noted that the rule, which was issued during the last days of the previous administration, would stifle American innovation and raise serious concerns about taxpayer privacy, in addition to imposing unprecedented regulatory burdens on the DeFi sector.
The US Senate is expected to vote this week to repeal this rule along with another rule related to digital assets, the Consumer Financial Protection Bureau’s regulation targeting big tech companies that handle consumer payments via digital wallets and digital payment apps.
Both resolutions are being introduced under the Congressional Review Act, a measure that allows Congress to overturn recent federal regulations, signaling an escalating standoff between regulators and the government over the future of financial regulation in the cryptocurrency sector.
