Crypto platforms will be required to report transactions to the Internal Revenue Service from 2026. However, decentralized platforms that do not hold assets themselves will be exempt.
These are the main points New rules which was finalized by the IRS and the US Treasury Department on Friday – essentially implementing a provision of the Biden administration’s Infrastructure Investment and Jobs Act, which was passed in 2021.
Profits from selling crypto and other digital assets taxable Even without these new rules; however, there was no real standardization about how those profits were to be reported to individual investors and the government. Starting in 2026 (covering transactions in 2025), crypto platforms will have to provide a standard 1099 form, similar to the 1099 forms sent by banks and traditional brokerages.
In addition to simplifying paying taxes on crypto, the IRS also said it is trying to crack down on tax evasion.
“We need to ensure that digital assets are not used to conceal taxable income, and these final rules will improve detection of noncompliance in the high-risk area of digital assets,” said IRS Commissioner Danny Werfel. a statement,
But again, these rules apply to “custodial” platforms (like Coinbase) that actually take possession of a client’s assets. Following lobbying from the crypto industry, decentralized brokers that do not take possession are excluded from these rules.
In fact, the Blockchain Association (an industry lobbying group) called a boycott “This is a testament to the incredibly powerful voice of our industry and community.”
The Treasury Department and the IRS said they would subject these decentralized brokers to separate regulations.
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