The US House of Representatives has moved to reject new rules requiring DeFi brokers to report digital asset transactions to the IRS.
Resolution on DeFi Broker Rules
The new IRS rule, approved on December 5 and set to take effect in 2027, aimed to expand existing reporting requirements, including decentralized exchanges, to disclose full transaction details. On February 26, the House Ways and Means Committee voted 26 to 16 to pass the resolution overturning the rule.
Opposition to New Rules
Miller Whitehouse-Levine, CEO of the DeFi Education Fund, called the rule 'an unlawful and unconstitutional overreach' requiring repeal to protect Americans' choice in transactions. He urged Congress to support overturning the rule to foster financial innovation in the US. Committee Chairman Jason Smith also criticized the rule as a threat to US digital asset leadership and unworkable for DeFi brokers.
Political Context and Implications
If the resolution passes the House, it moves to the Senate, and then to President Donald Trump for veto or approval. Jason Smith noted that the IRS overstepped its 2021 mandate by over-regulating digital wallet providers, benefiting foreign entities. With numerous pro-crypto candidates elected and Republican control of Congress, significant shifts in the crypto space have occurred, including SEC closing cases against crypto firms.
The House's actions highlight the ongoing debate over cryptocurrency regulation and the need to balance oversight with support for innovation.
