The U.S. House of Representatives voted to repeal the DeFi broker rule. This is a regulation that required decentralized finance (DeFi) platforms to report crypto transactions to the Internal Revenue Service (IRS). Lawmakers passed the resolution with a 292-132 vote, marking a major step toward eliminating the rule.
House Votes Overwhelmingly to Repeal IRS DeFi Broker Rule
The IRS DeFi broker rule aimed to extend tax reporting requirements to crypto transactions. These are similar to those for banks and stockbrokers. The rule forced DeFi platforms, including decentralized exchanges, to disclose details about taxpayers and report gross proceeds from crypto sales.
The vote was bipartisan, with 76 Democrats joining Republicans in support of repealing the rule. However, all 132 votes against the repeal came from Democratic lawmakers. The House decision follows the Senate’s March 4 vote, where 70 senators voted to repeal the rule while 27 opposed it.
Supporters Say Rule Infringes on Privacy and Innovation
Republican Representative Mike Carey, who led the effort to overturn the rule, criticized it as a privacy invasion that would burden both the IRS and the crypto industry.
“The DeFi broker rule invades the privacy of tens of millions of Americans, hinders the development of an important new industry in the United States, and would overwhelm the IRS”, Carey stated after the vote.
House Financial Services Committee Chairman French Hill also welcomed the repeal, calling the rule an example of government overreach that could push U.S. crypto businesses offshore.
However, some lawmakers argued that repealing the rule creates a loophole for tax evasion and financial crimes.
Democrat Representative Lloyd Doggett said that removing the rule would make it easier for wealthy individuals to avoid paying taxes
Getting a special interest exemption from IRS disclosures makes tax evasion and money laundering so much easier for wealthy Republican donors who have been using these decentralized exchanges.
Doggett claimed.
Senate Must Vote Again Before the Resolution Reaches President Trump
To be fully repealed, the resolution must pass another Senate vote before it reaches President Donald Trump’s desk. Trump has previously indicated that he would support the repeal.
Earlier this month, White House AI and crypto adviser David Sacks also backed the move. He said that the rule would stifle innovation and raise privacy concerns. Officials from the Office of Management and Budget also warned that the rule would impose an unnecessary compliance burden on U.S. DeFi companies.
If the repeal becomes law, DeFi platforms will no longer need to report user transactions to the IRS.
