The US House of Representatives has voted in favor of nullifying a rule that would have required decentralized finance (DeFi) protocols to report to the Internal Revenue Service.

On March 11, the House of Representatives voted 292 for and 132 against a motion to repeal the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.

All 132 votes to keep the rule were Democrats. However, 76 of those in the party joined the Republican vote to repeal it. 

This follows the US Senate’s March 4 vote on the motion to repeal, which saw it pass with a vote of 70 to 27.

The rule would force DeFi platforms, such as decentralized exchanges, to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.

Speaking after the vote, Republican Representative Mike Carey, who submitted the repeal motion, said, “The DeFi broker rule 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.”

House Financial Services Committee Chairman French Hill also applauded the overturning of the rule, calling it “a clear example of government overreach that threatens to push American digital asset development overseas.”

The resolution will need to pass another Senate vote before being sent to President Donald Trump, who has signaled he’d support it.

Those opposing the rule repeal included Democrat Representative Lloyd Doggett, who said getting a “special interest exemption” from IRS disclosures “makes tax evasion and money laundering so much easier for wealthy Republican donors who have been using these decentralized exchanges.”

He claimed killing the rule would create a “loophole that would be exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”

Related: US lawmakers advance resolution to repeal ‘unfair’ crypto tax rule

In early March, White House AI and crypto czar David Sacks said the administration would support congressional efforts to rescind the DeFi broker rule.

At the time, officials from the Office of Management and Budget wrote “This rule … would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies.” 

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A member of the Texas legislature has proposed a bill that could limit the amount local and state authorities invest in cryptocurrency as a reserve asset.

In a bill filed on March 10, Texas Representative Ron Reynolds proposed the state’s comptroller not be allowed to invest more than $250 million of its Economic Stabilization Fund — otherwise known as a “rainy day” fund — in Bitcoin (BTC) or other cryptocurrencies. The legislation also suggested that Texas municipalities or counties could not invest more than $10 million in crypto.

The proposed bill followed the Texas Senate passing legislation on March 6 to establish a strategic Bitcoin reserve in the state. The SB 21 bill seemingly could allow the Texas comptroller to have no limit on purchasing BTC for a reserve, based on the most recent draft. 

Related: Bitcoin reserve backlash signals unrealistic industry expectations

The plan for a strategic Bitcoin reserve in Texas was one of many separate bills proposed in US state governments following the inauguration of President Donald Trump and Republican lawmakers winning control of the US House of Representatives and Senate. Texas Lieutenant Governor Dan Patrick said in January that the state’s legislative priorities for 2025 would include a proposal to establish a Texas Bitcoin Reserve.

Is there a partisan divide on state and federal crypto plans?

It’s unclear if Rep. Reynolds, a Democrat, intended to support the BTC reserve bill introduced by State Senator Charles Schwertner, a Republican, or propose restrictions in the event the legislation becomes law. If passed and signed by Governor Greg Abbott, the bill would take effect on Sept. 1. Cointelegraph reached out to Rep. Reynolds’ office for comment but did not receive a response at the time of publication. 

Though Trump signed an executive order on March 7 to create a federal “Strategic Bitcoin Reserve” and “Digital Asset Stockpile,” many legal experts have questioned the US president’s authority to enact specific policies through EOs. Wyoming Senator Cynthia Lummis reintroduced legislation on March 11 to codify the proposed BTC reserve into law in the Senate.

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