This is a segment from the Forward Guidance newsletter. To read full editions, subscribe . The Blockchain Association has spoken again. Or, well, they’ve written another letter. From the advocacy group that last month brought you a “consensus position” on market structure policy comes a warning to lawmakers on Capitol Hill. The choices they have: act, or possibly “cripple DeFi innovation in this country altogether.” If you don’t remember, there was a proposed rule — finalized under the Biden administration — that would expand the “broker” definition to include software that allows users to access DeFi protocols. The Blockchain Association says this “inappropriately and unlawfully misclassifies technology infrastructure as intermediaries” — forcing software companies that never take custody of users’ assets to nonetheless collect (and report to the government) those users’ personal info and transaction details. The Wednesday letter , addressed to Sens. John Thune and Chuck Schumer, as well as Reps. Mike Johnson and Hakeem Jeffries, calls for them to vote “yes” on Sen. Ted Cruz’s Congressional Review Act (CRA) resolution and repeal the so-called DeFi broker rule. Blockchain Association’s Kristin Smith reminded us how long this battle goes back: 2/ 3+ years ago, the Infrastructure Investment and Jobs Act became law and amended the definition of a “broker” to include “any person who, for consideration, is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” — Kristin Smith (@KMSmithDC) February 12, 2025 The IRS then sought to implement this new definition in 2023. The agency, in June 2024, applied the rule to centralized intermediaries — leaving out reporting requirements for decentralized or non-custodial brokers. In December though, a second IRS rule sought to force tax reporting obligations onto crypto software providers that don’t act as intermediaries. The effort by Cruz and Rep. Mike Carey to reverse it came two days after Trump’s inauguration. This vote is (very) big for two reasons: (1) We get a heat check from the Dems on a limited crypto-specific resolution. They had an unpopular crypto platform under Biden and this rule encapsulates everything wrong with that approach. It's going to pass regardless, with at least… https://t.co/oSm0H4eBAK — Scott Johnsson (@SGJohnsson) February 19, 2025 Blockchain Association members are set to discuss the CRA resolution with Congressional offices in DC on Feb. 26, a group spokesperson said. It’s unclear when exactly a vote would take place. The latest letter adds: “Policy decisions with such severe consequences should be made by Congress deliberately — not accidentally through ill-conceived midnight rulemaking.” Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter . Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter . Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more. The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
