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The U.S. House of Representatives has voted overwhelmingly to repeal the IRS DeFi broker rule, a move that is expected to have significant implications for the decentralized finance (DeFi) industry.
Under the repealed rule, decentralized exchanges and other platforms would no longer be required to report user transactions to the Internal Revenue Service (IRS), effectively exempting them from tax reporting requirements similar to those faced by banks and stockbrokers. The move has been met with both applause and criticism from various stakeholders in the crypto space.
The repeal was supported by 76 Democrats, who joined Republicans in voting in favor of the change. However, all 132 votes against the repeal came from Democratic lawmakers.
The House decision follows a Senate vote last week, where 70 senators voted to repeal the rule, while 27 opposed it. The move now requires another Senate vote before it can reach President Donald Trump’s desk. Trump has previously expressed support for the repeal and White House AI and crypto adviser David Sacks has also backed the change, citing concerns over innovation stifling and privacy.
In a statement following the vote, Republican Representative Mike Carey criticized the original rule as an invasion of privacy that would burden both the IRS and the DeFi 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,” he said.
In contrast, Democrat Representative Lloyd Doggett expressed concerns over tax evasion and financial crimes, arguing that repealing the rule creates a loophole 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,” he claimed.
The House vote marks a significant development in the ongoing debate over crypto regulation, with many seeing this as a major victory for the DeFi industry.
