- American legislators push to repeal the rules of the DEFI broker, citing excessive intervention by the government
- The change led by the Republicans can alleviate cryptographic regulations as the priorities for applying the law go to immigration
American legislators postpone against the controversial “broker” rule, which obliges decentralized exchanges and digital asset brokers to report the details of the transaction to the IRS. tOn February 26, the Chamber’s Road and Meaning Committee voted on 26-16 to advance a resolution aimed at repealing the rule before its implementation scheduled for 2027.
Source: Ways and Meaning Committee / X
Originally approved by IRS on December 5, the regulation aims to extend the declaration requirements, convincing brokers to disclose the cryptocurrency sales products and taxpayers.
However, criticisms argue that applying such measures on decentralized platforms is not practical and represents excessive intervention by the government.
Why do legislators criticize?
The president of House Ways and Means, Jason Smith (R-MO), criticized the tax rule of the IRS, declaring that it aims to “unnecessarily regulate the suppliers of digital portfolios”.
He argued that the regulations would impose an excessive burden on American companies, while giving an advantage to foreign entities which are not subject to the same declaration requirements.
Echoing these concerns, Miller Whitehouse-Levine, CEO of the DEFI Education Fund, described the rule of “illegal and unconstitutional overcoming”. He emphasized the need for his repeal to “protect the freedom of choice of Americans in the way they pass”.
He said,
“We urge all members – and all those who wish to establish the United States as a hub for financial innovation – to act quickly to maintain the initial intention of the congress by supporting the motion aimed at canceling this erroneous rule.”
How is this decision useful in the United States?
Needless to say, the effort to repeal the DEFI broker’s rule reflects a broader transformation in American cryptography regulations, motivated by the control of the republican party in both the Senate and the Chamber.
With a wave of pro-Crypto legislators in the congress, industry leaders speculate that the United States could be on the way to become one of the most friendly administrations in history.
This change is already obvious, because the SEC has withdrawn multiple measures to apply the law against cryptographic companies throughout February – a sign of a more indulgent regulatory approach.
Trump’s pro-Crypto movements
In addition, during the Davos World Economic Forum, Trump also accused major banks, notably Jpmorgan Chase and Bank of America, of engaging in a “politically motivated de-banking”. At the time, he said they excluded the conservatives under regulatory pressure.
While the banks have denied any fault and Trump did not provide concrete evidence, his allegations nevertheless stimulated an investigation led by the Republicans on potential financial discrimination.
Consequently, while the Trump administration resumes its priorities, its impact on cryptographic regulations remains uncertain, leaving the industry to anticipate potential regulatory relief.
