White House Backs Cruz Resolution Rescinding IRS Crypto Rule

The White House has thrown its support behind a resolution introduced by Texas Senator Ted Cruz (R) and Ohio Congressman Mike Carey (R) that would overturn an IRS rule targeting the cryptocurrency industry. David Sacks, President Donald Trump’s (R) White House A.I. and Crypto Czar, announced the administration’s position, calling the rule “an 11th-hour attack on the crypto community by the Biden administration.”

The rule in question, which was issued by the IRS on December 30, 2024, expands the definition of “broker” to include software facilitating decentralized finance (DeFi) transactions. This would require certain DeFi participants to report gross proceeds from cryptocurrency sales and other digital asset transactions, including taxpayer data. Critics of the rule argue that it places an undue compliance burden on DeFi platforms and threatens user privacy.

In a Statement of Administration Policy from the White House, it states that the rule, issued as a “midnight regulation” by the previous administration, would “stifle American innovation” and create unnecessary privacy risks. The administration vowed to maintain a regulatory environment that supports innovation, job creation, and economic well-being while preventing overreach into the crypto sector.

“If S.J. Res. 3 were presented to the President, his senior advisors would recommend that he sign it into law,” the statement concluded.

The resolution is expected to be a key battleground between lawmakers advocating for financial innovation and those seeking stricter oversight of digital assets. Though proponents argue that DeFi’s decentralized nature makes traditional tax reporting infeasible, regulators warn that lax oversight could enable tax evasion and financial crimes.