Cryptocurrency platforms will soon be subject to new reporting requirements to the Internal Revenue Service (IRS) in the United States, which will come into effect in 2026.
This follows the finalization of provisions by the IRS and the U.S. Department of the Treasury, implementing a provision of the 2021 Infrastructure Investment and Jobs Act by the Biden administration.
Starting from transactions in 2025 (the year before the new requirements are introduced), crypto platforms will be required to report profits from the sale of digital assets using a standardized Form 1099, similar to those used by traditional banks and brokerages. This is intended to streamline tax reporting for investors and enhance oversight to combat tax evasion in the digital asset sector.
IRS Commissioner Danny Werfel emphasized the importance of these provisions in preventing abuse of digital assets and concealing taxable income, highlighting their role in improving compliance with the law in this high-risk area.
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However, these rules specifically apply to custodial platforms such as Coinbase, which directly manage client assets. Decentralized platforms that do not hold client assets, following lobbying efforts by the crypto industry, are exempt from these reporting requirements. The Blockchain Association welcomes this exemption as a significant achievement, underscoring the industry’s influence and advocacy for the community.
Moving forward, the Department of the Treasury and the IRS plan to consider reporting obligations for decentralized brokers through a separate set of provisions, taking into account the evolving landscape of digital asset transactions.
