US House Moves to Repeal IRS DeFi Broker Rule in Key Vote

• The US House of Representatives voted to repeal the IRS DeFi broker rule.
• Lawmakers argued that the rule placed excessive burdens on DeFi platforms.
• The resolution passed with bipartisan support, with 76 Democrats joining Republicans.

The US House of Representatives advanced a resolution to repeal the IRS DeFi broker rule. Lawmakers argued that the regulation imposed excessive compliance burdens on decentralized finance platforms. The resolution will now proceed to the Senate for a final vote.

House Votes to Overturn DeFi Broker Rule

The House of Representatives voted to repeal the IRS rule that classified DeFi platforms as brokers. 292 lawmakers supported the repeal, while 132 opposed it. The decision received bipartisan support, with 76 Democrats joining Republicans in voting against the rule.

The IRS introduced the rule in December under the Biden administration. It sought to impose strict data reporting requirements on DeFi platforms and decentralized protocols. Critics argued that enforcing compliance would be technically unfeasible due to the absence of centralized control over user funds.

Supporters of the repeal contended that the regulation threatened innovation within the US crypto sector. They warned that restrictive reporting rules could drive digital asset businesses overseas. The Blockchain Association also urged Congress to reject the rule, citing its potential harm to the industry.

Critics Call the Rule Overly Burdensome

Lawmakers who opposed the rule described it as an example of government overreach. They emphasized that DeFi software providers, who do not control user funds, should not be classified as brokers. The requirement to report user transactions would impose costly and unnecessary burdens on decentralized platforms.

French Hill, chairman of the House Financial Services Committee, strongly criticized the rule. He stated that defining software providers as brokers would undermine privacy and hinder financial innovation. He further argued that the policy would weaken the United States’ leadership in digital asset development.

White House AI and Crypto Czar David Sacks also backed the repeal. He posted on X that the administration supports efforts to eliminate the regulation. His statement reinforced the growing opposition to the IRS proposal within government and industry circles.

Senate to Decide the Fate of the Resolution

After the House passes the resolution, the Senate will determine whether to repeal the rule. If approved, it will prevent the IRS from implementing similar regulations in the future, which could provide long-term protection for decentralized finance platforms.

If the Senate rejects the resolution, the IRS may attempt to enforce comparable rules under a revised framework. However, strong bipartisan opposition suggests the repeal has a high chance of passing. The outcome will shape the future of DeFi regulation in the United States.

Once passed by the Senate, the resolution will move to President Donald Trump’s desk. If signed into law, it will mark a significant victory for the DeFi industry and signal a major policy shift in the federal government’s approach to decentralized finance.