Support for Rolling Back DeFi Broker Rule

According to an X post by Trump’s AI and Crypto Czar, David Sacks, the White House backs Senator Ted Cruz and Representative Mike Carey in their bill to roll back the DeFi Broker law enacted by the previous Biden administration.

In January, Representative Mike Carey (OH-15) introduced a CRA resolution to repeal the Internal Revenue Service’s controversial Digital Assets Sale and Exchanges Rule, known as the IRS Broker Rule.

The Congressional Review Act (CRA) allows Congress to disapprove a federal agency’s final rule. If disapproved, the rule becomes null and prevents reissuance unless Congress allows it. Carey argues that the existing digital asset broker rule from the Biden administration is excessive and could stifle innovation and investment.

Senator Cruz supported this view, stating, “The Biden administration’s rule attempts to drive American cryptocurrency innovation overseas. This regulation undermines the purpose of DeFi technology… America should prioritize innovation, and this rule is the opposite. I call upon Congress to pass this resolution quickly.”

Three industry groups—Blockchain Association, DeFi Education Fund, and Texas Blockchain Council—challenged the IRS after introducing their bill.

White House’s Support for the CRA

David Sacks announced on Twitter that the White House endorses Rep. Carey and Sen. Cruz’s CRA resolution. He mentioned, “The White House is pleased to announce its support for the CRA introduced by @SenTedCruz and @RepMikeCarey to rescind the so-called Broker DeFi Rule, an 11th-hour attack on the crypto community by the Biden administration.” An image of a statement from the Executive Office of the President was included in the post.

The statement suggested that rolling back the rule aligns with Trump’s agenda to prioritize American citizens, promoting innovation and investment in the U.S.

Trump’s Administration’s Actions

Since taking office on January 20, Trump has acted swiftly, issuing various executive orders. Though it took time for crypto to gain his attention, there have been significant shifts within the industry. A working group formed by the government aims to evaluate crypto regulations and propose changes. David Sacks leads this group. Notably, there’s a ban on central bank digital currency and a revocation of Biden’s crypto-related executive order.

Sacks has also been appointed co-chair of the President’s Council of Advisors on Science and Technology. Additionally, Gary Gensler has stepped down from his position at the SEC, now headed by Acting Chair Mark Uyeda, who has initiated a crypto-focused task force led by Commissioner Hester Peirce.

Moreover, the SEC rescinded Staff Accounting Bulletin 121, which mandated publicly traded companies to classify crypto holdings as liabilities. Meanwhile, the Commodity Futures Trading Commission operates under Acting Chair Caroline Pham, engaging with the crypto sector.

In a significant move, Trump pardoned Ross Ulbricht, the creator of Silk Road, citing support from Ulbricht’s mother and the Libertarian Movement. He has also announced a strategic reserve of Bitcoin and other top cryptocurrencies.

Under Elon Musk’s leadership, the Department of Government Efficiency (DOGE) is actively addressing government spending. Though Trump and his administration have only been in power for a short time, their initiatives regarding crypto continue to progress swiftly.