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US House committee advances resolution to repeal DeFi broker rule

US House committee advances resolution to repeal DeFi broker rule

GrafaGrafa2025/02/27 10:40
By:Mahathir Bayena

The House Ways and Means Committee has advanced a resolution to repeal the IRS's "DeFi broker rule," a decision welcomed by the crypto industry but opposed by some Democrats.

The resolution, which passed the committee by a 26-16 vote on February 26, 2025, seeks to overturn a rule approved on December 5 that expands broker reporting requirements to include decentralised exchanges (DEXs).

The rule mandates brokers to disclose gross proceeds from cryptocurrency sales and taxpayer information.

The resolution now moves to the House floor for a vote.

If passed, it would then proceed to the Senate and, if successful, would be sent to President Trump for approval.

Supporters argue that the rule is an overreach that misinterprets the technology and could stifle innovation.

Miller Whitehouse-Levine, CEO of the DeFi Education Fund, called the rule an "unlawful and unconstitutional overreach."

House Ways and Means Committee Chairman Jason Smith stated that the regulation "could stifle America’s digital asset leadership" and is "unworkable" because "DeFi brokers do not even collect the information from users needed to implement this rule."

Critics also contend that the rule puts U.S. firms at a disadvantage compared to foreign competitors.

The Blockchain Association, along with over 75 members, sent a letter to Congress urging support for the resolution, arguing that the rule "misunderstands both the technology it attempts to regulate and Congress’s original intent."

However, some Democratic lawmakers defend the rule as necessary for tax compliance.

Republican Rep. Jason Smith accused the federal government of overextending existing tax laws, while Rep. Richard Neal argued that repealing the rule would encourage tax avoidance.

The Congressional Budget Office estimates that repealing the rule would reduce U.S. tax revenue by $3.9 billion over a decade.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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