A regulatory development for the decentralized finance (DeFi) sector is underway as the repeal of the IRS DeFi Broker Rule advances to its next voting stage. The proposed repeal seeks to remove reporting requirements imposed on DeFi platforms operating in the United States.
Repeal Advances to U.S. House of Rep
The U.S. House of Representatives will vote Tuesday to nullify the IRS DeFi broker rule, following a decisive Senate vote last week that supported the proposal by a 70–27 margin. The next stage in the legislative process will result in vigorous debate in Capitol Hill, setting the stage for significant changes in how DeFi is regulated.
According to a post by Eleanor Terrett on X (formerly Twitter), the landslide Senate vote was driven by unexpected backing from key Senate Democrats, including Senators Chuk Schumer and Mark Warner. The support shows bipartisan recognition that the rule’s reporting requirements may have harmed the decentralized finance sector more.
Supporters of the repeal emphasize that easing these restrictions would allow for a more efficient and competitive marketplace. They also point to the existing rule as imposing high operational costs on DeFi platforms targeting U.S. customers. At the same time, critics warn that the repeal might open the door to increased risks of tax evasion and fraud.
IRS officials have also acknowledged that some provisions of the rule may need amendment to achieve more balanced and innovative oversight. Nonetheless, a favorable outcome could further pave the way for a more flexible regulatory framework in the U.S., which is believed to fuel innovation while maintaining necessary safeguards against financial risks.
Not the First Repeal
Beyond the IRS DeFi Broker Rule repeal, another crypto-related regulatory change surfaced recently. The U.S. Securities and Exchange Commission (SEC) has reversed its SAB 121 guidance, which previously required banks to treat customer-held crypto as liabilities. The move cleared the path for traditional financial institutions to expand their crypto custody services.
In addition, the agency has halted enforcement actions against crypto firms like Coinbase and Kraken, shifting toward a more accommodating regulatory stance for the crypto industry. Other ongoing initiatives include the establishment of a crypto task force to draft a comprehensive digital asset regulatory framework.
