US House Votes to Repeal Controversial IRS DeFi Broker Rule Following Senate Approval

The U.S. House of Representatives has voted to repeal 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). This decision follows a similar vote in the Senate, marking a significant shift in the regulatory landscape for the cryptocurrency industry.

Key Takeaways

• The House voted 292-132 to repeal the IRS DeFi Broker Rule, following a Senate vote of 70-27.

• The rule aimed to classify DeFi platforms as brokers, imposing reporting requirements similar to traditional financial institutions.

• Critics argued the rule was unworkable and would stifle innovation in the U.S. crypto sector.

• The resolution now awaits President Trump's signature to become law.

Background of the IRS DeFi Broker Rule

The IRS DeFi Broker Rule was introduced during the Biden administration as part of efforts to close tax loopholes in the digital asset industry. It aimed to expand existing IRS reporting requirements to include decentralized exchanges, requiring them to disclose gross proceeds from crypto sales and taxpayer information involved in these transactions.

However, the rule faced significant backlash from lawmakers and industry advocates who argued that it was impractical for decentralized platforms that operate without centralized control. Senator Ted Cruz, a prominent advocate for the repeal, stated that the IRS overstepped its authority and that the rule threatened U.S. competitiveness in the crypto space.

Legislative Journey

The repeal process began in the Senate, where the resolution passed with a strong bipartisan majority. Following this, the House of Representatives voted on March 11, 2025, to nullify the rule. The vote saw 292 in favor and 132 against, with all opposition votes coming from Democrats, although a significant number of Democrats joined Republicans in support of the repeal.

Implications for the Crypto Industry

The repeal of the IRS DeFi Broker Rule is seen as a major victory for the cryptocurrency industry. Industry leaders, including Kristin Smith, CEO of the Blockchain Association, hailed the vote as a pivotal moment for DeFi and the U.S. crypto sector. Smith emphasized that this action reflects a broader commitment to keeping crypto innovation within the United States.

The rule's repeal is expected to alleviate compliance burdens on DeFi platforms, allowing them to operate without the fear of overwhelming regulatory requirements. This decision is also viewed as a step towards creating a more favorable regulatory environment for digital assets in the U.S.

Next Steps

With the House's approval, the resolution will now be sent to President Trump for his signature. If signed into law, the IRS will be prohibited from enforcing similar regulations in the future. This legislative action is part of a broader trend towards more crypto-friendly policies, as lawmakers seek to balance innovation with necessary regulatory oversight.

As the crypto industry continues to evolve, many experts believe that while this repeal is a significant win, further regulatory frameworks will be necessary to ensure fair tax enforcement and compliance in the rapidly changing digital asset landscape.

Sources

• US Senate Passes Resolution To Kill IRS DeFi Broker Rule, FinanceFeeds.

• US Senate passes resolution to kill ‘unworkable’ IRS DeFi broker rule, Cointelegraph.

• US House follows Senate in passing resolution to kill IRS DeFi broker rule, Cointelegraph.

• Crypto Victory: Senate Votes to Kill "Unworkable" IRS DeFi Rule, Blockonomi.

• Effort to Kill IRS Crypto Rule Clears U.S. Senate Hurdle, CoinDesk.