The U.S. Department of the Treasury Proposes New Crypto Tax Regulations: Crypto Trading Platforms Require the IRS to Report Total Transaction Income

On August 25th, in order to deal with the tax evasion of cryptocurrency investors, the U.S. Department of the Treasury proposed new tax regulations. These regulations are intended to simplify complex tax issues and ensure cryptocurrency investors comply with tax laws. According to the proposal, by 2026, cryptocurrency trading platforms such as Coinbase will need to file Form 1099s with the Internal Revenue Service (IRS), reporting gross income from transactions. In addition, the trading platform will also start reporting the cost basis of assets purchased by clients at a later date. The purpose of these new regulations is to increase tax transparency and ensure investors file their taxes correctly. Additionally, the regulations will also apply to non-fungible tokens (NFTs) and decentralized finance platforms.