US lawmakers have taken a major step towards scrapping the controversial 'DeFi broker rule,' which would require digital asset brokers to report transactions to the Internal Revenue Service. The House Ways and Means Committee passed a resolution to repeal the regulation, arguing it is unworkable and threatens the country's leadership in financial innovation. If the resolution clears the House and Senate, it will then go to President Donald Trump for approval.

Set to take effect in 2027, the rule would force decentralised exchanges to report gross proceeds from crypto sales, including taxpayer details. Critics say this would place an undue burden on DeFi platforms, which do not collect such data, whilst giving foreign crypto firms an unfair advantage. Miller Whitehouse-Levine of the DeFi Education Fund called the rule an 'unlawful and unconstitutional overreach' that must be overturned to protect financial freedom.

Ways and Means Committee Chairman Jason Smith condemned the regulation, stating it was pushed through during former President Joe Biden's final days in office and would create excessive paperwork the IRS cannot manage. With a Republican-led Congress and growing pro-crypto sentiment in Washington, industry leaders believe the US government could soon become more supportive of digital assets. The recent dismissal of multiple SEC cases against crypto firms suggests a shift towards a more crypto-friendly regulatory environment.

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