The U.S. House of Representatives has moved forward with a resolution aimed at repealing the controversial “DeFi broker rule,” which mandates brokers to report cryptocurrency transactions to the Internal Revenue Service (IRS). The regulation, scheduled to take effect in 2027, expands reporting requirements to decentralized exchanges and compels brokers to disclose transaction details, including taxpayer information.
On Feb. 26, the House Ways and Means Committee voted 26 to 16 in favor of overturning the rule, arguing that it constitutes an overreach by the IRS. Critics, including DeFi advocacy groups, claim the regulation is both unlawful and impractical, as decentralized finance platforms often lack the means to collect the required user data. Supporters of the repeal argue that the rule threatens financial innovation and unfairly burdens U.S.-based crypto firms while exempting foreign entities.
The resolution now faces additional hurdles, needing approval from the full House and Senate before it can be sent to President Trump for final approval. Lawmakers backing the repeal contend that the rule, introduced during the Biden administration, could stifle America’s leadership in the digital asset space and create excessive administrative burdens. Former IRS Commissioner Charles Rettig also warned that enforcing the rule would result in overwhelming paperwork for the IRS.
With a Republican-controlled Senate and House, industry leaders speculate that the U.S. government may adopt a more pro-crypto stance. This shift has already been reflected in recent regulatory developments, including the SEC’s decision to drop several cases against crypto firms. The push to repeal the DeFi broker rule aligns with broader efforts to establish the U.S. as a more welcoming environment for cryptocurrency and blockchain innovation.
