A bipartisan majority in the US House repealed the IRS DeFi broker regulation.
The US House of Representatives repealed a regulation requiring decentralized finance (DeFi) systems to report to the IRS.
The House voted 292 yes and 132 no on March 11 to abolish the IRS DeFi broker rule, which expanded IRS reporting obligations to bitcoin.
All 132 pro-rule votes were Democratic. However, 76 party members voted for repeal with Republicans.
The US Senate passed the repeal motion 70–27 on March 4.
Decentralized exchanges and other DeFi platforms would have to publish crypto sales gross profits and taxpayer information under the regulation.
Republican Representative Mike Carey, who introduced the repeal motion, stated, “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.”
After voting, Congressman Mike Carey spoke. From Mike Carey
French Hill, chairman of the House Financial Services Committee, called the rule reversal “a clear example of government overreach that threatens to push American digital asset development overseas.”
The measure must pass another Senate vote before being given to President Donald Trump, who has indicated support.
Democrat Representative Lloyd Doggett opposed the regulation repeal, saying 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 said removing the law would create a “loophole that would be exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
Related: US legislators pass ‘unfair’ crypto tax rule repeal
David Sacks, White House AI and crypto czar, said the administration will back congressional DeFi broker regulation repeal attempts in early March.
The Office of Management and Budget said that the regulation will hinder innovation, create privacy issues, and impose a heavy compliance cost on American DeFi firms.
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