The IRS is finalizing new cryptocurrency tax reporting rules

Cryptocurrency platforms will be required to report transactions to the Internal Revenue Service starting in 2026. However, decentralized platforms that do not hold assets themselves will be exempt from this requirement.

Here are the key takeaways from the new regulations that the IRS and the U.S. Treasury finalized on Friday — essentially implementing provisions of the Biden administration’s Infrastructure Investment and Jobs Act, which was passed in 2021.

Gains from selling cryptocurrencies and other digital assets are taxable even without these new rules; however, there has been no real standardization in how these gains are reported to individual investors and the government. Starting in 2026 (covering transactions in 2025), cryptocurrency platforms must provide a standard Form 1099, similar to those sent by banks and traditional brokerages.

In addition to making it easier to pay taxes on cryptocurrencies, the IRS has also said it is trying to 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 noncompliance in a high-risk area like digital assets,” IRS Commissioner Danny Werfel said in a statement.

But again, these regulations apply to “custodial” platforms (like Coinbase) that actually take customer assets. After lobbying from the cryptocurrency industry, decentralized brokers that do not take assets are excluded from these regulations.

In fact, the Blockchain Association (the industry’s lobbying group) called the exclusion “a testament to the incredibly strong voice of our industry and community.”

The Treasury Department and IRS have announced that they will cover these decentralized brokers with a separate set of regulations.