By Key Points
- The US House passed a resolution to repeal the IRS DeFi broker rule.
- A bipartisan majority voted 292-132 in favor of nullifying the rule.
- The rule would have required DeFi platforms to report transactions to the IRS.
- The resolution now heads to the Senate before reaching President Trump.
The US House of Representatives has voted to overturn the IRS DeFi broker rule, a regulation that would have required decentralized finance (DeFi) platforms to report transaction data to the Internal Revenue Service (IRS). With a 292-132 vote, lawmakers took a decisive step against what many see as regulatory overreach that could stifle crypto innovation.
This follows a similar move by the US Senate, which voted 70-27 to repeal the rule on March 4. If the resolution passes another Senate vote, it will move to President Donald Trump, who has signaled his support.
292-132-1: House voted to repeal a Biden Admin IRS rule via Congressional Review Act requiring decentralized financial (DeFi) participants (“brokers”) to report gross proceeds from sales of cryptocurrencies & other digital assets. Joint disapproval resolution now heads to Senate. pic.twitter.com/mb0su8fgQT
— Craig Caplan (@CraigCaplan) March 11, 2025
Why lawmakers opposed the IRS DeFi rule
The IRS rule, initially introduced under the 2021 Infrastructure Investment and Jobs Act, sought to apply traditional broker reporting requirements to DeFi platforms. If enacted, decentralized exchanges (DEXs) and other crypto platforms would have been required to report users’ transaction details, including gross proceeds from crypto sales.
Critics, including Republican Representative Mike Carey, argue that this rule would severely impact American crypto users and companies. “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.
✅ Passed! ✅
The House just passed my bill to repeal the IRS DeFi Broker Rule in a strong, bipartisan fashion.
Now we need to get it on @POTUS‘s desk and signed into law. pic.twitter.com/lCWAjICPJV
— Congressman Mike Carey (@RepMikeCarey) March 11, 2025
French Hill, Chairman of the House Financial Services Committee, echoed similar concerns, calling the rule a “clear example of government overreach that threatens to push American digital asset development overseas.”
The White House has also voiced concerns over the rule’s potential impact. In early March, officials from the Office of Management and Budget warned that it could “stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies.”
This debate over DeFi regulation comes at a time when the sector is already facing challenges, with DeFi TVL dropping by $45 billion due to market volatility and regulatory uncertainty.
Opponents warn of tax loopholes and financial crime
While the repeal has received strong bipartisan support, some lawmakers argue that scrapping the rule could open the door for tax evasion and illicit financial activities. Democrat Representative Lloyd Doggett voiced concerns that eliminating these reporting requirements would make it easier for “wealthy tax cheats, drug traffickers, and terrorist financiers” to exploit DeFi platforms.
Supporters of the IRS rule insist that DeFi platforms should be held to the same reporting standards as traditional financial institutions. They argue that without these requirements, crypto could become a tax evasion tool for the wealthy.
The crypto market has already been experiencing turbulence, with Solana’s price dropping and XRP active addresses surging despite a 10% price drop. Such volatility, combined with regulatory uncertainty, makes the future of DeFi in the US even more unpredictable.
Meanwhile, concerns over cybersecurity in the digital asset space remain high, especially after Elon Musk’s X suffered a cyberattack, highlighting the growing risks in the online financial ecosystem.
With the resolution now moving toward a final Senate vote, the future of crypto regulation in the US remains uncertain. While many see the repeal as a win for DeFi and financial privacy, others warn that loosening tax rules could lead to greater scrutiny of the industry down the road.
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