Starting in 2026, cryptocurrency platforms will be required to report transactions to the Internal Revenue Service (IRS). However, decentralized platforms that do not hold assets themselves will be exempt from these regulations.
These regulations, finalized by the IRS and the U.S. Department of Treasury on Friday, implement a provision of the Biden administration’s Infrastructure Investment and Jobs Act, enacted in 2021.
While gains from selling cryptocurrencies and other digital assets are already taxable, there has been no standardized method for reporting these gains to investors and the government. Beginning in 2026, covering transactions from 2025, crypto platforms must provide a standard 1099 form, similar to those sent by banks and traditional brokerages.
This move aims to simplify tax payments on crypto transactions and crack down on tax evasion.
“We need to make sure digital assets are not used to hide taxable income, and these final regulations will improve detection of noncompliance in the high-risk space of digital assets,” said IRS Commissioner Danny Werfel in a statement.
These regulations apply specifically to “custodial” platforms, such as Coinbase, that take possession of customer assets. Due to lobbying from the crypto industry, decentralized brokers that do not take possession of assets are excluded from these rules.
The Blockchain Association, an industry lobbying group, hailed this exclusion as “a testament to the incredibly powerful voice of our industry and community.”
The Treasury Department and IRS indicated that they will address decentralized brokers in a separate set of regulations.
