Cryptocurrency platforms will have to report transactions to the US Internal Revenue Service starting in 2026, although decentralized platforms that don't hold assets will be exempt.
These were the main points of the new regulations finalized by the IRS and the U.S. Treasury Department on Friday, which essentially implement provisions of the Biden administration's Infrastructure Investment and Jobs Act passed in 2021.
While gains from the sale of cryptocurrencies and other digital assets are taxable even without these new regulations, there has been no real standardization on how those holdings should be reported to governments and private investors. Starting in 2026 (for transactions in 2025), crypto platforms will be required to provide standard 1099 forms similar to those sent by banks and traditional brokerages.
The IRS said it is working to not only simplify paying taxes on cryptocurrencies, but also crack down on tax evasion.
“We need to ensure that digital assets are not used to hide taxable income, and these final regulations will improve detection of violations in this high-risk area of digital assets,” IRS Commissioner Danny Wuerfel said in a statement.
But again, these regulations apply to “custodial” platforms (such as Coinbase) that actually hold customer assets. Decentralized brokers that do not hold them are exempt from these rules due to lobbying from the crypto industry.
Indeed, the Blockchain Association, an industry lobbying group, called the exclusion a “testament to the incredibly powerful voice of our industry and community.”
The Treasury Department and the IRS said they would cover these decentralized brokers under separate regulation.