IRS’s New Rule Threatened to Be Canceled, What Impact for DeFi?

Jakarta, Pintu News – US lawmakers are moving to overturn a controversial Internal Revenue Service (IRS) tax rule that requires decentralized finance DEFI->Current DEFI PriceRp 0Market CapRp 0Trading VolumeRp 0Circulating SupplyRp 0 brokers to report crypto transactions.

The US House Ways and Means Committee has voted to overturn the rule with a 26-16 result. The next step is a vote in the full House.

Check out the full news below!

The First Step Toward Cancellation

On February 26, a resolution to rescind the rule successfully advanced from the Ways and Means Committee to the US House of Representatives. If the House votes in favor, the Senate will decide the rule’s fate next.

President Donald Trump will have the option to sign or veto the ruling if it reaches his desk. This rule, known as the “DeFi broker rule,” was proposed by the IRS in August 2023 and officially finalized in January 2024. It will require certain DeFi operators to collect and report user transaction data.

This includes gross proceeds from the sale of crypto, which the IRS says will level the playing field for taxpayers with traditional financial institutions.

Read also: How much does 1 Pi Network (PI) cost (2/28/25)?

Criticism from Various Parties

Various parties criticized this rule. Ways and Means Committee Chairman Jason Smith stated that it is unworkable for DeFi, where platforms often operate without centralized control and do not collect user data by design.

Miller Whitehouse-Levine, CEO of the DeFi Education Fund, welcomed the decision to overturn the rule, calling it an “unauthorized and unconstitutional violation.” However, there are concerns regarding the privacy impact, as platforms like Uniswap may be required to collect user identities, which goes against the basic ethos of decentralized finance.

Bill Hughes, a lawyer from Consensys, sees this as the previous administration’s last attempt to curb crypto before leaving office.

Read also: Plummeting 10.46%, How Much is 1 Pi Network (PI) to Dollar Today (2/28/25)?

IRS Response and Legal Challenges

Despite the controversy, the IRS remains firm with its stance. In a joint statement with the Treasury Department, the agency rejected the argument that DeFi should be exempted, stating, “Persons with technological expertise who operate a trade or business related to financial services must comply with the same rules as other persons who operate financial services businesses”.

The Blockchain Association, DeFi Education Fund, and Texas Blockchain Council have sued the IRS, claiming that the rule will force DeFi developers to comply with regulations they cannot enforce. As Kristin Smith, CEO of the Blockchain Association, states, this will push crypto innovation overseas.

Conclusion

Given the challenges and criticisms, this move by the US House of Representatives could be an important turning point in regulating crypto and decentralized finance. The final decision by the Senate and possibly the President will largely determine the future of operations and innovation in the DeFi sector.

That’s the latest information about crypto news today. Get more information about crypto academy from beginner to expert level only at Pintu Academy and enrich your knowledge about the world of crypto and blockchain.

Follow us on Google News for the latest updates on crypto and blockchain technology. Enjoy an easy and secure crypto trading experience by downloading Pintu crypto app via Google Play Store or App Store now.

Experience web trading with advanced trading tools such as pro charting, various order types, and portfolio tracker only at Pintu Pro. Click Register Pintu if you don’t have an account or click Login Pintu if you are already registered.

*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Crypto News. US Lawmakers Move to Overturn Controversial IRS DeFi Broker Rule. Accessed on February 28, 2025
• Featured Image: Generated by AI