The U.S. House of Representatives voted 292-132 Tuesday to rescind an IRS rule that would have required decentralized finance platforms to collect and report taxpayer information, a crucial bipartisan rebuke of crypto regulations finalized in the waning days of the Biden administration.
Votes came in with 76 Congressional Democrats crossing the floor, backing critics who argued the rule would have imposed technically impossible compliance requirements on DeFi protocols.
This rule is both “unfair” and “unworkable,” House Ways and Means Committee Chairman Jason Smith (R-MO) argued on the floor debate. “There are real questions that the rule can ever even be administered.”
“DeFi platforms do not and cannot even collect the information from users needed to implement this rule. Their software never controls the digital assets,” Smith said in a prepared statement delivered to the House.
Representative Mike Carey (R-OH) submitted the joint resolution on January 21, 2025. An update from the Office of the Speaker confirms the vote tally.
The House vote follows similar bipartisan support in the Senate last week, tapering off previous discussions in the House from late February that the rule contained “burdensome requirements.”
The IRS regulation would have expanded the definition of “broker” to include DeFi platforms, requiring them to file Form 1099-DA tax documents despite most protocols lacking the technical ability to collect user information.
A supermajority vote in this direction shows an “encouraging sign of a new era for crypto in Washington,” Blockchain Association CEO Kristin Smith said in a statement.
Democrats opposing the measure raised concerns about tax compliance and revenue loss. Texas Democrat Lloyd Doggett (D-TX) characterized the resolution as a “special interest legislation” that could be “exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
The resolution invoked the Congressional Review Act, which allows Congress to overturn newly finalized federal regulations.
If signed into law, it would prevent the IRS from issuing similar rules in the future without explicit congressional authorization.
The joint resolution now returns to the Senate for another vote due to budget rules before heading to President Trump’s desk, where it’s expected to receive his signature.
Edited by Sebastian Sinclair
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