House Votes to Repeal IRS DeFi Broker Rule, 76% in Favor

The United States House of Representatives has taken a significant step in the regulatory landscape of the crypto industry by voting to nullify a rule that threatened the privacy-preserving properties of decentralized finance (DeFi) protocols. The rule, known as the IRS DeFi broker rule, aimed to expand existing IRS reporting requirements to crypto, forcing DeFi platforms to disclose gross proceeds from crypto sales and information regarding taxpayers involved in the transactions. This move was seen as an invasion of privacy and a hindrance to the development of the DeFi industry.

The vote, which took place on March 11, saw 292 representatives voting in favor of repealing the rule and 132 against it. Notably, 76 Democrats joined Republicans in supporting the repeal, highlighting the bipartisan nature of the opposition to the rule. This followed a similar vote in the Senate on March 4, which passed with a 70 to 27 margin. The repeal of the rule was hailed as a victory for the DeFi industry, which has long advocated for regulatory clarity that respects the privacy of its users.

In the wider crypto space, the Solana network faced a significant governance proposal that sought to implement a mechanism to reduce its inflation rate by about 80%. The proposal, known as SIMD-228, was rejected by stakeholders, with only 43.6% of the staked supply voting in favor of it. Despite the rejection, the proposal was hailed as a victory for the network's governance process, as it demonstrated the network's ability to handle large-scale governance votes with a wide stratification of diverging opinions and interests.

The proposal required 66.67% approval from participating votes to pass, but it only received 61.4%. Around 74% of the staked supply voted on the proposal across 910 validators. The rejection of the proposal was seen as a meaningful scaling stress test for the network, highlighting its resilience and the effectiveness of its governance process. The vote was described as the biggest crypto governance vote ever, by the number of participants and the participating market cap, of any ecosystem, chain, or network.