Key Points
- US Congress has voted to repeal the DeFi Broker Rule, with the decision now awaiting President Trump’s approval.
- The potential repeal has received mixed reactions, with concerns raised about potential tax loopholes and impacts on innovation.
The controversial “DeFi Broker Rule,” introduced during the Biden administration, is facing opposition from U.S. lawmakers. The rule requires transaction reporting to the IRS. Both the Senate and the House of Representatives have voted to overturn the rule, due to concerns about its impact on innovation and financial privacy.
IRS DeFi Rule: Awaiting Approval
The resolution to repeal the rule, S.J.Res.3, passed the Senate with a 70-28 vote and the House with a 292-132 majority, indicating bipartisan opposition. The repeal is now awaiting President Donald Trump’s approval. If approved, it would represent a significant change in DeFi’s regulatory landscape and crypto taxation.
The rule was introduced with the aim of enforcing strict reporting requirements on DeFi platforms. It mandates exchanges to disclose transaction details and gross proceeds.
Reactions to the Potential Repeal
While many celebrated the Senate vote, others expressed disappointment. Critics argue that such regulations could 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 suggested that the repeal could facilitate tax evasion and illicit financial activities.
The broader crypto market has shown mixed sentiment in response to these developments. The global market cap dipped to $2.86 trillion—a 0.41% decline. At the time of writing, 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. As regulatory battles continue to shape the industry, market participants remain watchful of how these developments could influence the future of decentralized finance.
