The U.S. House of Representatives has voted to repeal the IRS rule requiring DeFi platforms to report user transactions.
The repeal passed with bipartisan support in a 292-132 vote, with all opposing votes coming from Democrats; however, 76 Democrats joined Republicans in supporting the repeal.
This rule is both “unfair” and “unworkable,” House Ways and Means Committee Chairman Jason Smith (R-MO) argued on the floor debate. “There are real questions that the rule can ever even be administered.”
“DeFi platforms do not and cannot even collect the information from users needed to implement this rule. Their software never controls the digital assets,” Smith added.
The repealed DeFi broker rule would have mandated decentralized exchanges and other DeFi platforms to report transaction details to the IRS, including user information and gross proceeds from crypto sales.
Republican Representative Mike Carey condemned the measure as a “massive government overreach” that threatened the privacy of millions of Americans while potentially hindering the growth of a promising industry. House Financial Services Committee Chairman French Hill echoed these concerns, stating the rule exemplifies government overreach and could push digital asset innovation out of the United States.
The House vote follows the Senate’s decision on March 4, where lawmakers also moved to strike down the rule with a 70-27 majority, according to decrypt. On February 26, the House advanced a resolution to repeal the measure, showing increasing opposition from both chambers of Congress. It will now return to the Senate for a final vote before being sent to President Trump for approval.
In related legislative developments, Senator Bill Hagerty has introduced an updated version of the GENIUS Act ahead of a Senate Banking Committee vote on March 13. The bill seeks to strengthen regulatory standards for stablecoin issuers by implementing stricter reserve and compliance requirements, especially for non-U.S. issuers. Analysts believe this will provide U.S. firms like Circle and Ripple a competitive advantage over foreign competitors.
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