The U.S. Senate has just voted to repeal the controversial cryptocurrency tax regulation of the Internal Revenue Service (IRS), marking a significant victory for the administration of President Donald Trump and the crypto industry. With a result of 70 votes in favor and 27 against, this resolution is awaiting approval from the House of Representatives before being sent to Trump for signing into law.
What Does This Resolution Mean?
Regulation #IRS , issued by the Biden administration in December 2024, requires cryptocurrency exchanges and decentralized finance (DeFi) protocols to report all revenue from the sale of digital assets. However, many crypto experts oppose this, arguing that:
The regulation expands the definition of "broker" excessively, including decentralized DeFi protocols, which lack a centralized entity for oversight or compliance.
Requiring DeFi to register like a traditional brokerage, while this is a permissionless system.
Forcing all DeFi users in the U.S. to link personal identities with on-chain wallet addresses raises privacy concerns.
How Did the U.S. Senate Reverse the Regulation?
This resolution was introduced under the Congressional Review Act (CRA), allowing lawmakers to repeal federal agency regulations if deemed inappropriate.
Surprisingly, many Democratic senators supported the repeal of the regulation, even though it was issued under President Biden. Kristin Smith, CEO of the Blockchain Association, described this as "incredible," witnessing a large number of Democratic members willing to side with crypto.
Additionally, the Trump administration has officially supported the repeal of this crypto tax regulation. David Sacks, crypto policy advisor of $TRUMP , stated that the White House "fully supports" the resolution as it protects privacy and avoids unnecessary burdens on U.S. DeFi companies.
What Does the Crypto Community Say?
Many organizations in the crypto industry have welcomed this decision. The DeFi Education Fund, a crypto lobbying group in Washington, commented:
"Today marks the first historical milestone in building a crypto legal framework in the U.S. This resolution helps protect the trading freedoms of the people and promotes technological innovation."
The repeal of the IRS tax regulation is an important step forward, while also laying the groundwork for the first independent crypto legislation in the future.
What Will the Future of Crypto in the U.S. Look Like?
The U.S. Senate's reversal of the crypto tax regulation indicates a more open trend towards the cryptocurrency industry, especially from the Trump administration. This could pave the way for:
✅ More friendly crypto regulations, helping the U.S. compete with countries like #Singapore or the UAE in the Web3 space.
✅ DeFi continues to grow, not stifled by overly strict legal barriers.
✅ The U.S. crypto community has a stronger voice in politics, as more lawmakers support the industry.
However, this resolution still needs to be passed by the House of Representatives before it officially becomes law. Will the U.S. move closer to a clear and reasonable crypto legal framework? Or is this just a political maneuver ahead of the elections? We will soon find out the answer.