The US Senate voted 70-28 on Wednesday to approve a resolution that cancels the IRS rule targeting DeFi platforms. The bill now goes to President Donald Trump, who’s expected to sign it into law by Friday, making it the first crypto-related legislation to officially pass under his administration.
The original rule—pushed during the Biden era—tried to force decentralized protocols to report to the IRS like traditional brokers. That meant developers and platforms would have to track user data and submit transaction reports, even though most DeFi tools don’t hold customer funds. That plan just got nuked.
The final Senate vote came after the House of Representatives passed its own version of the bill on March 11. The Senate had already passed a similar version earlier this month, but budget bills have to start in the House, so it bounced back for final approval.
Lawmakers, Trump team, and crypto firms reject the IRS rule
The CRA was introduced in the Senate by Senator Ted Cruz of Texas. He called the repeal “a victory for American innovation” after the earlier Senate vote. Trump’s AI and crypto adviser, David Sacks, confirmed the president supports overturning the rule, meaning Trump’s signature is now just a formality.
This isn’t just a win for politicians. More than 30 crypto companies banded together the morning of the Senate vote to send a letter to lawmakers. They sent it to the Senate Banking and Judiciary Committees and the House Financial Services and Judiciary Committees, demanding answers on how the Department of Justice (DOJ) is interpreting money transmitter laws. The companies behind the letter include Coinbase, Kraken, A16z, Multicoin Capital, Paradigm, Exodus, and Ledger.
The letter was led by the DeFi Education Fund, a policy group focused on defending decentralized systems. The group’s executive director, Amanda Tuminelli, said in the letter that the DOJ’s legal strategy could “expose software developers to criminal liability simply for writing code.”
The companies pushed back against the DOJ’s view that DeFi tools fall under Section 1960 of the criminal code, which is meant to regulate centralized entities that move money without a license. The DOJ claims DeFi protocols can be considered “money transmitting businesses” under that law—even if the developer doesn’t touch customer funds. That interpretation, according to the crypto firms, goes against FinCEN’s 2019 guidance, which said developers aren’t considered money transmitters.
The fight over this issue isn’t just theory. In August 2023, the DOJ filed criminal charges against Roman Storm, one of the co-founders of Tornado Cash, a crypto mixer. The DOJ accused him of running an unlicensed money-transmitting business and enabling money laundering. It was the first time criminal charges had been filed against a DeFi developer. That case spooked the entire crypto industry.
Amanda Tuminelli called the DOJ’s move “regulation by criminal indictment.” She said the DeFi Education Fund’s top priority right now is to force Congress to clearly define Section 1960 to protect software developers. She also thanked the crypto companies that joined the effort to push back.
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