The House of Representatives of the United States voted massively to cancel the controversial rule of the DEFI broker introduced by the Internal Internal Service (IRS) under the administration of President Joe Biden.
The measure was adopted with strong bipartisan support, while 292 legislators voted in favor while 132 opposed it. Although many Democrats have resisted the repeal, 76 broke the ranks to join the Republicans to cancel the rule.
Last December, the IRS finalized the broker’s rule, expanding tax declaration requirements to include digital asset operators. The regulations have classified brokers – including the front operators DEFI – as responsible for applying your client’s measures (KYC), monitoring of user activity, transactions declaration and compliance guarantee.
Critics argued that the application of these requirements to the DEFI platforms was not practical. Unlike centralized exchanges, DEFI platforms do not control user funds or do not have access to personal data, which makes it impossible to comply with the rule.
The president of the House Ways and Means committee, Jason Smith, condemned the rule, calling it unfair and difficult to implement. He stressed that DEFI platforms do not work like traditional financial institutions and cannot collect the user information required for compliance.
He added:
“These new regulations of IRS cryptography oblige millions of taxpayers to submit a new form 1099 in a manner that would overwhelm the agency and have little or no value for the effective and efficient tax administration.”
Meanwhile, this House decision follows the vote of the Senate of March 4 to cancel the controversial provision.
The two rooms now aligned, the resolution returns to the Senate for final approval before reaching the office of President Donald Trump. In particular, the White House has already indicated the support of this decision.
The cryptographic community reacts
The leaders of the cryptographic community welcomed the decision, celebrating it as an important victory.
Jake Cervinsky, legal director of Variant Fund, stressed the importance of bipartite support, noting that 94 Democratic legislators supported the repeal. According to Cervinsky, this indicates a defeat for the anti-Crypto agenda.
The director of Coinbase policy, Faryar Shirzad, described it as the most important voting of cryptocurrency to date, adding that it strengthens the momentum so that the congress is advancing stablecoin and market structure legislation.
He added:
“The impassable rule of the IRS DEFI broker has established a precedent dangerous for the privacy of Americans.”
Meanwhile, the CEO of the DEFI Education Fund, Miller Whitehouse-Levine, also praised the vote, stressing that a bipartite supermajure of 292 members of the Chamber recognized the faults of the IRS and the rule of the IRS and the Treasury broker. He said this decision is a positive step towards promoting innovation in the United States.
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