- U.S. Congress votes to repeal DeFi Broker Rule, awaiting Trump’s final approval.
- Critics warned that repeal might create tax loopholes; the crypto market reacted with mixed sentiment.
U.S. lawmakers are opposing the controversial “DeFi Broker Rule,” introduced during the Biden administration, requiring transaction reporting to the IRS.
In a major legislative move, both the Senate and the House of Representatives have voted to overturn the rule, citing concerns over its impact on innovation and financial privacy.
IRS DeFi rule fate put to test
The resolution, S.J.Res.3, passed the Senate with a 70-28 vote and the House with a 292-132 majority, signaling bipartisan opposition.
Now awaiting President Donald Trump’s approval, the repeal signals a major shift in DeFi’s regulatory landscape and crypto taxation.
The Senate’s approval of the resolution was expected, as a similar version had passed earlier in March.
Due to constitutional rules on budget-related legislation, the House introduced its version, passed on the 11th of March. This version was then sent back to the Senate for a final vote.
With Trump’s AI and crypto advisor, David Sacks, confirming Trump’s support for repealing the rule, momentum against the regulation has grown.
The rule aimed to enforce strict reporting requirements on DeFi platforms, mandating exchanges to disclose transaction details and gross proceeds.
Critics disappointed
Applauding the Senate vote, Blockchain Association CEO Kristin Smith said in a statement,
“Following its second bipartisan vote in the Senate, the Congressional Review Act resolution to roll back the DeFi-killing broker rule now moves to President Trump’s desk for a final signature.”
She further added,
Thank you to Senator Cruz, Representative Carey, and all of the pro-innovation members who voted to strike down the DeFi broker rule.”
However, despite strong bipartisan support for repealing the DeFi broker rule, some lawmakers remained firmly opposed.
Critics argue that such regulations would place excessive burdens on decentralized platforms, stifling innovation and limiting the growth of the DeFi sector.
Democratic Representative Lloyd Doggett criticized the resolution, claiming it provides special exemptions that benefit wealthy individuals. He argued that it could facilitate tax evasion and illicit financial activities.
Doggett warned that removing the rule might create loopholes for bad actors, including tax cheats and criminal enterprises.
Current market condition
This coincided with the broader crypto market reflecting mixed sentiment, with the global market cap dipping to $2.86 trillion—a 0.41% decline over the last day.
At press time, Bitcoin [BTC] was trading at $87,480.97 after a slight 0.16% drop, while Ethereum [ETH] saw a sharper 1.68% decline, trading at $2,027.13.
Therefore, as regulatory battles continue to shape the industry, market participants remain watchful of how these developments could influence the future of decentralized finance.
