A key U.S. House of Representatives committee has proposed a resolution to repeal the controversial “DeFi broker rule,” which would impose new tax reporting requirements on decentralized finance (DeFi) platforms.
The House Ways and Means Committee voted 26-16 on February 26 to advance the resolution, setting up a potential showdown over the rule, which is set to take effect in 2027. Initially approved by the Internal Revenue Service (IRS) on December 5, the regulation would require brokers—including decentralized exchanges—to report cryptocurrency transaction details, including gross proceeds and taxpayer information, to the IRS.
Critics argue that the rule is both unconstitutional and impractical. Miller Whitehouse-Levine, CEO of the DeFi Education Fund, called it an “unlawful and unconstitutional overreach,” urging lawmakers to overturn the measure to safeguard financial innovation in the United States.
“We urge all members—and all who want to establish the United States as a hub for financial innovation—to act swiftly to uphold Congress’s original intent by supporting the motion to overturn this misguided rule,”
Whitehouse-Levine said.
Ways and Means Committee Chairman Jason Smith strongly opposed a regulation introduced during President Biden’s final days in office, arguing it could hinder U.S. leadership in digital assets. He noted that DeFi brokers lack the necessary infrastructure to comply, rendering the rule “unfair and unworkable.” Former IRS Commissioner Charles Rettig raised concerns about the potential for excessive paperwork, which could overwhelm the IRS’s capabilities. With the Republican Party holding majorities in both the House and Senate, industry experts believe this could lead to a pro-crypto stance from the U.S. government
Recent regulatory rollbacks have occurred, including the SEC dropping cases against crypto firms, such as its investigation into OpenSea. A resolution to repeal the “DeFi broker rule” is currently moving through Congress; if it passes the House and Senate, it will be sent to President Trump for final approval, who can either veto or sign it into law.
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