White House Issues Pivotal Statement on Cryptocurrency

White House Backs Congressional Move to Repeal Controversial ‘Broker DeFi Rule’

In a major development for the cryptocurrency and decentralized finance (DeFi) sectors, the White House has voiced its support for a congressional resolution aimed at overturning the so-called “Broker DeFi Rule.” This regulation, issued by the Internal Revenue Service (IRS) in the final days of the previous administration on December 30, 2024, has been met with significant opposition from industry leaders and lawmakers alike.

Understanding the ‘Broker DeFi Rule’

The IRS rule in question expands the definition of “intermediary” to include software facilitating DeFi transactions. Under this regulation, certain DeFi platforms and participants would be required to report detailed financial data, including gross proceeds from cryptocurrency sales and taxpayer information, significantly increasing compliance obligations. Critics argue that this rule places an undue burden on DeFi businesses and threatens user privacy, ultimately stifling innovation in the blockchain space.

White House Endorses Congressional Resolution to Repeal the Rule

White House cryptocurrency and artificial intelligence chief David Sacks confirmed the administration’s support for the Congressional Review Act (CRA) resolution—formally known as SJ Res. 3—introduced by Senator Ted Cruz and Representative Mike Carey. If passed, this resolution would nullify the IRS rule, providing relief to DeFi projects and crypto investors.

The administration released a Statement of Administration Policy underscoring its commitment to fostering an innovation-friendly regulatory landscape. The statement reads:

“This rule, issued as a midnight regulation in the final days of the previous administration, will stifle American innovation and raise privacy concerns about the sharing of taxpayer personal information. Our administration will continue to put the American people first by fostering a regulatory environment that fosters innovation, creates jobs, and enhances economic prosperity for all Americans.”

What Happens Next?

If Congress passes SJ Res. 3, it would override the IRS regulation, providing much-needed clarity and relief for DeFi participants. According to the White House, if the resolution reaches President Trump’s desk, senior advisers will recommend that he sign it into law.

This move signals a shift in the U.S. government’s approach to cryptocurrency regulation, focusing on balancing oversight with innovation. The potential repeal of the Broker DeFi Rule could encourage further growth in the DeFi space while addressing privacy and compliance concerns.

Conclusion

The battle over cryptocurrency regulation continues, but the White House’s backing of the CRA resolution offers a glimmer of hope for DeFi advocates. By repealing the controversial IRS rule, the government aims to create a more innovation-friendly environment while addressing privacy and compliance challenges in the rapidly evolving digital asset landscape.

Stay tuned for more updates on cryptocurrency regulations, market trends, and investment insights at Nexus Market View.