Regulation
IRS Finalizes New Rules to Tax Cryptocurrencies
Crypto platforms will have to report their transactions to the Internal Revenue Service starting in 2026. However, decentralized platforms that do not hold assets themselves will be exempt.
These are the main takeaways from new regulations that the IRS and the U.S. Treasury Department finalized Friday — essentially implementing a provision of the Biden administration’s Infrastructure Investment and Jobs Act, which passed in 2021.
Crypto assets are taxable Even without these new regulations, there was no real standardization on how these assets were reported to the government and individual investors. Starting in 2026 (covering 2025 transactions), crypto exchanges will have to provide a standard 1099 form, similar to those sent by traditional banks and brokers.
In addition to making it easier to pay taxes on cryptocurrencies, the IRS also said it is trying to combat tax evasion.
“We must ensure that digital assets are not used to hide taxable income, and these final regulations will improve the detection of non-compliance in the high-risk digital asset space,” said the Commissioner of the IRS, Danny Werfel, in A declaration.
But again, these regulations apply to “custodian” platforms (like Coinbase) that actually take possession of customer assets. After lobbying from the crypto industry, decentralized brokers that do not take ownership are excluded from these rules.
In fact, the Blockchain Association (an industry lobby group) called exclusion “a testament to the incredibly powerful voice of our industry and community.”
The Treasury Department and the IRS have said they will cover these decentralized brokers in a separate set of regulations.