US House Vote on DeFi Rule Offers Relief for DAO Operations
The US House of Representatives has voted to nullify an Internal Revenue Service rule that would require decentralized finance protocols to report user transaction data. On March 11, the resolution passed with 292 votes in favor and 132 against, demonstrating strong bipartisan support for blocking the regulation.
While all 132 votes to keep the rule came from Democrats, 76 members of the party crossed the aisle to join Republicans in supporting the repeal. This House action follows the US Senate's similar move on March 4, when senators voted 70-27 to advance the resolution against the IRS rule.
The contested regulation would have compelled DeFi platforms, including decentralized exchanges and DAOs, to disclose gross proceeds from cryptocurrency sales. The rule would have created significant challenges for Decentralized Autonomous Organizations, which by design lack centralized entities capable of collecting and reporting user transaction data.
Republican Representative Mike Carey, who submitted the repeal motion, criticized the rule after the vote. He stated that it "invades the privacy of tens of millions of Americans, hinders the development of an important new industry in the United States and would overwhelm the IRS."
Opposition to the repeal came from lawmakers including Democrat Representative Lloyd Doggett. He claimed removing the reporting requirements would create opportunities for:
- Tax evasion by wealthy individuals
- Money laundering activities
- Financing for criminal enterprises
- Exploitation by "terrorist financiers"
The resolution now requires another Senate vote before reaching President Donald Trump's desk. The White House has previously expressed support for congressional efforts to rescind the rule, with administration officials stating it would "stifle American innovation and raise privacy concerns."
This vote offers several potential benefits for DAOs operating in the United States:
- Reduced regulatory burden for organizations that lack centralized reporting structures
- Enhanced privacy protection for DAO participants
- Decreased operational risks for DAOs that technically cannot comply with such requirements
- Improved competitiveness against international DAO projects
House Financial Services Committee Chairman French Hill praised the vote, calling the original rule "a clear example of government overreach that threatens to push American digital asset development overseas." The resolution requires another Senate passage before reaching President Trump's desk for final approval.
