US House Votes to Repeal IRS DeFi Broker Rule, Following Senate's Lead

On March 11, 2025, the US House of Representatives voted overwhelmingly to repeal the IRS DeFi broker rule, which would have required decentralized finance (DeFi) platforms to disclose transaction details and taxpayer information to the Internal Revenue Service (IRS). The vote passed with 292 in favor and 132 against, with bipartisan support for the repeal. Notably, all 132 votes to retain the rule came from Democrats, although 76 Democrats joined Republicans in opposing it. This vote follows the US Senate’s passage of a similar resolution on March 4, which passed with 70 votes in favor and 27 against.

The rule, which aimed to extend existing IRS reporting requirements to crypto transactions, faced strong opposition from industry leaders and lawmakers who viewed it as an infringement on privacy and a potential barrier to innovation in the digital asset sector. Republican Representative Mike Carey, who spearheaded the repeal motion, called the rule an "invasion of privacy" and warned that it could harm the development of the DeFi industry in the US. House Financial Services Committee Chairman French Hill echoed these concerns, labeling the rule as “government overreach” that could push American digital asset development overseas.

While supporters of the repeal argue that it protects privacy and fosters innovation, opponents, including Democrat Representative Lloyd Doggett, voiced concerns that removing the rule would create a loophole for tax evasion, money laundering, and other illegal activities. Doggett specifically warned that the repeal would benefit wealthy individuals using decentralized exchanges to avoid tax disclosure requirements. Despite these concerns, the broader push for repeal gained traction with both major political parties, as many lawmakers emphasized the need for more balanced regulation in the rapidly evolving crypto space.

The resolution now moves to the Senate for another vote before heading to President Donald Trump, who has expressed support for the repeal. The White House and key officials from the Office of Management and Budget have also voiced concerns over the rule’s potential to stifle innovation and impose excessive compliance burdens on American DeFi companies, making it likely that the repeal will ultimately be enacted.