The rule, finalized back in December 2024, would have forced decentralized finance platforms to collect and report mountains of user data. That’s not great for privacy.
Even worse? Many DeFi platforms literally can’t comply—they’re not built to track users like traditional brokers.
Now the resolution heads to the full House for a vote. If it passes there, the Senate gets a crack at it. Final step: the President’s desk. The whole process falls under the Congressional Review Act, which gives lawmakers a 60-day window to axe new agency rules they hate. Clock’s ticking.
Committee Chairman didn’t mince words, calling the rule “unfair and unworkable.” No kidding. The rule would generate a staggering 8 billion new pieces of paperwork.
Even a former IRS commissioner warned it would overwhelm the agency. Talk about shooting yourself in the foot.
The crypto industry rallied hard against this one. The Blockchain Association led a 75-member coalition pushing for repeal.
DeFi Education Fund’s CEO didn’t hold back, labeling it an “unconstitutional overreach.” They weren’t alone—crypto advocates already sued the IRS.
The House Ways and Means Committee showed strong support with a 26-16 vote in favor of repealing the controversial rule.
Sure, killing the rule means saying goodbye to $3.9 billion in projected revenue over a decade.
But critics argue it would cost America its leadership in digital assets. With roughly 25% of Americans now owning cryptocurrency, there’s serious political weight behind this fight.
DeFi’s reliance on smart contracts to automate financial processes makes it fundamentally different from traditional systems that rely on human intermediaries.
The effort’s mostly Republican-led but has pulled in some Democratic support. Senator Ted Cruz is championing a companion resolution in the Senate.
Privacy advocates have voiced particular concern that the rule represents a dangerous invasion of taxpayer privacy for DeFi participants who value anonymity in their transactions.
If Congress succeeds, similar rules would be blocked indefinitely. That’s what you call a win for DeFi defenders.
