Cryptocurrency platforms will soon face new reporting requirements from the Internal Revenue Service (IRS) of the United States, set to take effect in 2026.
Prior to this, the IRS and the U.S. Department of the Treasury finalized regulations implementing provisions of the Biden administration’s 2021 Infrastructure Investment and Jobs Act.
Beginning with transactions in 2025 (the year before the new requirements launch), cryptocurrency platforms will be required to use standardized 1099 forms to report profits from the sale of digital assets, similar to forms used by traditional banks and brokerage firms. This move aims to simplify tax reporting for investors and enhance oversight to combat tax evasion in the digital asset space.
IRS Commissioner Danny Werfel emphasized the importance of these regulations in preventing abuse of digital assets and tax evasion, highlighting their role in improving compliance in this high-risk sector.
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However, these rules particularly apply to custodial platforms like Coinbase, which directly manage customer assets. Following lobbying efforts from the cryptocurrency industry, decentralized platforms that do not hold customer assets are exempt from these reporting requirements. The Blockchain Association
welcomes
this version as a significant achievement, highlighting industry influence and community advocacy.
Looking ahead, the Treasury and IRS plan to address reporting obligations for decentralized brokers through a separate set of regulations, considering the evolving landscape of digital asset transactions.
