U.S. lawmakers vote to cancel an IRS rule that required crypto companies, including DeFi platforms, to collect and report taxpayer and transaction information.

The House passed the vote 292-132, following the Senate's decision to reject the rule that was finalized during the final days of former President Biden's administration.

The U.S. House of Representatives voted to cancel an IRS rule that would have required crypto companies, including DeFi platforms, to collect and report taxpayer and transaction information. The vote was 292-132.

The Senate previously voted to reject the rule, which was finalized during the final days of former President Biden’s administration. This move could change how crypto businesses are regulated.

"This is the first step in making sure that the government isn't overreaching and stifling innovation in the digital asset space," said Missouri Republican Jason Smith, who urged lawmakers to support the resolution. He argued that the administration's rule, which was finalized during the final days of former President Biden's administration, could hurt U.S. businesses and render them less competitive.

According to Smith, the rule might also be impossible to enforce, especially on DeFi platforms. He explained that these platforms are structured differently from centralized crypto exchanges or banks and cannot readily gather the required user information to comply with the rule.

"DeFi platforms are fundamentally decentralized and operate without traditional hierarchical structures. They typically rely on smart contracts, which execute and enforce the terms of an agreement directly and trustlessly," Smith stated. He added that this structure makes it nearly impossible for platforms to collect personally identifiable information (PII) or track transactions in the manner demanded by the administration.

Last week, 70 Senators voted to overturn the IRS rule, and Trump's advisers reportedly urged him to sign it. However, due to a rule that budget-related bills must start in the House, the Senate will need to vote on the resolution one more time. Once that vote passes, it will go to President Trump’s desk as the first crypto-related bill to become law.

After the Senate vote, several lawmakers expressed their views on the matter. Illinois Democrat Danny Davis argued that the rule was part of the 2021 Infrastructure Act and that crypto platforms should report like stock brokers do.

"We're talking about reporting requirements for crypto platforms to collect and disclose information about their users' transactions and identities to the IRS," Davis said. "This is standard practice in other financial sectors. For example, stock brokers routinely report their clients' transactions and distribute Forms 1099 to report interest, dividends, and other income paid to taxpayers."

North Carolina Republican Tim Moore claimed that the administration overstepped in setting forth reporting requirements that could devastate the emerging digital asset industry and hamper U.S. innovation.

"The administration is attempting to impose reporting requirements that simply aren't feasible in the DeFi space," Moore said. "DeFi platforms are structured fundamentally differently from traditional financial institutions. They don't have the same capabilities to collect and report user data."

However, Texas Democrat Lloyd Doggett called the resolution “special interest legislation” that could help tax cheats, criminals, and terrorist financiers. He noted that it would add $4 billion to the national debt, going against President Trump’s goal to cut the debt.

"This measure would cancel a reporting requirement that is part of a broader effort to prevent tax evasion and other financial crimes," Doggett said. "It would also cut off a revenue stream that could help reduce the deficit."

The House vote could have broader implications for how crypto businesses are regulated in the U.S. It remains to be seen how the Senate will vote on the resolution and whether President Trump will sign it into law.