- The US House voted to repeal an IRS rule that required DeFi platforms to report crypto transactions to the government.
- Supporters say the rule repeal protects privacy while opponents warn it could allow tax evasion and illegal activities.
- The resolution needs another Senate vote before reaching President Trump who has signaled support for its approval.
The US House of Representatives has voted to nullify an Internal Revenue Service rule that required decentralized finance platforms to report transactions. The decision follows a similar vote which happened in the Senate and is a step near the approval by the President.
Bipartisan Support Leads to Overturn
On March 11, the House voted 292-132 to repeal the IRS DeFi broker rule. The rule aimed to expand existing IRS reporting requirements to DeFi platforms, including decentralized exchanges. It would have required these platforms to report gross proceeds from crypto sales and disclose taxpayer information linked to transactions.
The vote saw mixed support. While all 132 votes to keep the rule came from Democrats, 76 members of the party joined Republicans in favor of its repeal. This followed the Senate’s March 4 vote, where the motion passed 70-27.
Concerns Over Privacy and Industry Impact
Opponents of the rule argued it would harm the US crypto industry and violate user privacy. They claimed it would impose excessive compliance burdens on DeFi platforms, potentially pushing digital asset innovation overseas. Many also viewed it as an example of government overreach that could discourage investment in decentralized technologies.
People backing the rule said getting rid of it would produce tax-related loopholes. The supporters cautioned that eliminating reporting obligations would enable criminals to undertake tax evasion and money laundering while participating in illegal financial deals. The proposed rule change allowed wealthy people to use decentralized exchanges to minimize their tax obligations.
Final Steps for Resolution Approval
The resolution now requires another Senate vote before reaching President Donald Trump’s desk. The administration has signaled support for overturning the rule. In early March, White House officials stated that the rule could harm innovation and raise privacy concerns. They also argued that the compliance burden on DeFi companies would be excessive.
If the repeal is finalized, DeFi platforms would not be required to report user transactions to the IRS. The decision could shape future regulations surrounding crypto taxation and decentralized finance in the United States.