- U.S. House votes 292-132 to strike down IRS rule that would have required DeFi platforms to report taxpayer information, with 76 Democrats joining Republicans.
- Critics argued the rule imposed technically impossible compliance requirements on DeFi protocols that cannot collect user information.
- The resolution, using the Congressional Review Act, now returns to the Senate before heading to President Trump for expected signature.
In a significant display of bipartisan cooperation, the U.S. House of Representatives voted 292-132 on Tuesday to overturn an Internal Revenue Service rule that would have required decentralized finance (DeFi) platforms to collect and report taxpayer information. The vote represents a substantial rebuke to crypto regulations finalized during the final months of the Biden administration.
The measure gained considerable Democratic support, with 76 members crossing party lines to join Republicans in opposing the rule. Critics maintained that the regulation would have imposed compliance requirements that are technically impossible for most DeFi protocols to implement.
During floor debate, House Ways and Means Committee Chairman Jason Smith (R-MO) argued the rule was both unworkable and unfair. “There are real questions that the rule can ever even be administered,” Smith stated. In his prepared statement, he emphasized, “DeFi platforms do not and cannot even collect the information from users needed to implement this rule. Their software never controls the digital assets.”
The joint resolution was introduced by Representative Mike Carey (R-OH) on January 21, 2025. An update from the Office of the Speaker confirms the final vote tally.
This House action follows similar bipartisan support in the Senate last week, building on previous House discussions from February that characterized the rule as containing “burdensome requirements.”
At issue was an IRS regulation that would have broadened the definition of “broker” to include DeFi platforms, requiring them to file Form 1099-DA tax documents. The core challenge is that most DeFi protocols operate as autonomous software without centralized control and lack the technical capability to gather user identification information.
Blockchain Association CEO Kristin Smith called the supermajority vote an “encouraging sign of a new era for crypto in Washington” in a statement following the vote.
Not all lawmakers supported the measure. Those opposing it raised concerns about tax compliance and potential revenue losses. Texas Democrat Lloyd Doggett characterized the resolution as “special interest legislation” that could be “exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
The resolution invoked the Congressional Review Act, a legislative tool that allows Congress to overturn newly finalized federal regulations. If ultimately signed into law, the measure would not only nullify the current rule but also prevent the IRS from issuing similar rules in the future without explicit congressional authorization.
Due to budget procedural requirements, the joint resolution now returns to the Senate for another vote before proceeding to President Trump’s desk, where it’s widely expected to receive his signature.
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