The US House of Representatives has cast its vote in support of overturning a regulation that would have mandated decentralized finance (DeFi) platforms to report to the Internal Revenue Service.
On March 11, the House of Representatives voted 292 in favor and 132 against a proposal to abolish the so-called IRS DeFi broker regulation that sought to broaden current IRS reporting obligations to include cryptocurrency.
All 132 votes supporting the retention of the regulation came from Democrats. Nonetheless, 76 members from that party allied with the Republicans to annul it.
This action follows the US Senate’s vote on March 4 on the motion to revoke, which passed with a count of 70 to 27.
The regulation would compel DeFi services, like decentralized exchanges, to reveal gross revenue from cryptocurrency transactions, including details about the taxpayers engaged in those trades.
Following the voting, Republican Representative Mike Carey, who introduced the repeal motion, remarked, “The DeFi broker regulation invades the privacy of millions of Americans, obstructs the growth of a significant new sector in the United States, and would inundate the IRS.”
Congressman Mike Carey addressing the audience post-vote. Source: Mike Carey
Chairman of the House Financial Services Committee, French Hill, also commended the repeal of the regulation, labeling it “a clear manifestation of governmental overreach that threatens to drive American digital asset progress abroad.”
The resolution must undergo another Senate vote before being forwarded to President Donald Trump, who has indicated his endorsement.
Opponents of the regulation’s revocation included Democrat Representative Lloyd Doggett, who argued that granting a “special interest exemption” from IRS disclosures “facilitates tax evasion and money laundering for affluent Republican contributors utilizing these decentralized exchanges.”
He asserted that abolishing the regulation would create a “loophole that would be taken advantage of by wealthy tax evaders, drug traffickers, and those financing terrorism.”
Related: US legislators advance legislation to annul ‘unfair’ crypto tax rule
In early March, White House AI and crypto czar David Sacks stated that the administration would back Congressional efforts to rescind the DeFi broker regulation.
At that time, officials from the Office of Management and Budget wrote, “This regulation … would hinder American innovation and raise privacy concerns regarding the sharing of taxpayers’ private information while imposing an unprecedented compliance burden on American DeFi firms.”
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