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The Biden administration intends to impose further crypto platform reporting regulations. These regulations seek to guarantee that taxpayers in the United States appropriately report transactions involving digital assets.
The Internal Revenue Service (IRS) and the U.S. Department of Treasury published regulations on Friday requiring cryptocurrency brokers to register exchanges and sales of digital assets with the IRS beginning in 2025. Targeted by these restrictions are brokers who manage digital assets on behalf of their clients, such as custodial digital asset trading platforms, digital asset kiosks, digital asset providers, and certain digital asset payment processors (PDAPs).
The IRS believes this focus will cover the greatest number of taxpayers, as most digital asset transactions occur through these brokers. IRS Commissioner Danny Werfel stated, “These regulations are an important part of the larger effort on high-income individual tax compliance. 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.”
Additionally, real estate professionals must report the fair market value of digital assets used in transactions closing on or after January 1, 2026. However, transactions involving stablecoins, non-fungible tokens (NFTs), and digital asset payments are exempt from reporting if they do not exceed de minimis thresholds.
Decentralized or non-custodial brokers are not covered by these requirements. The IRS plans to issue a different set of regulations for these platforms.