The US Department of the Treasury and the Internal Revenue Service (IRS) have put forth new rules outlining what crypto brokers must report.
The US Small Business Administration’s Office of Advocacy has revealed that on August 29, a proposal for cryptocurrency regulations targeting brokers was introduced. Starting January 1, 2025, digital asset brokers, including trading platforms, payment processors, and specific hosted wallet providers, will be required to report the gross proceeds from all digital asset sales or exchanges.
These entities, referred to as “digital asset middlemen,” will also have to report gains and losses from cryptocurrency transactions, effective from January 1, 2026. These regulations aim to improve taxpayer compliance and provide the IRS with more detailed financial information.
The US Treasury and IRS are seeking input from small businesses in the US on how these regulations might impact their operations. A public hearing on this matter is scheduled for November 7, 2023.
Once enacted, the regulations will require US-based brokers to submit information returns to the IRS using the newly introduced Form 1099-DA and provide payee statements to their clients.
Additionally, the US Government Accountability Office has released a 77-page report emphasizing the need for stricter cryptocurrency regulations.
Blockchain technology—like #cryptocurrency—could offer faster, cheaper financial transactions. But recent price crashes & bankruptcies have raised concerns about gaps in federal regulations that could put consumers at risk. Our new report & video explore: https://t.co/1vyIgZVaYi pic.twitter.com/nxHrk1g5dQ
— U.S. GAO (@USGAO) July 24, 2023
Crypto Markets Need Federal Regulator, Says US Government Report
A recent US Government Accountability Office (GAO) report highlighted the regulatory gaps in spot markets for non-security crypto assets. The report recommended the appointment of a federal regulator to oversee these markets, aiming to mitigate financial stability risks and bolster user protection on crypto platforms.
Contrast with Traditional Markets
The report drew a comparison with the traditional asset sector, which benefits from a robust regulatory framework. It emphasized the need for similar oversight in the crypto space to address existing deficiencies.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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