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Starting in 2026, crypto platforms will be required to report transactions to the Internal Revenue Service (IRS), though decentralized platforms that do not hold assets themselves will be exempt.
These regulations, finalized by the IRS and the U.S. Department of Treasury on Friday, implement a provision from the Biden Administration’s Infrastructure Investment and Jobs Act, passed in 2021.
While gains from selling crypto and other digital assets were already taxable, there was previously no standardized method for reporting these gains to investors and the government. Beginning in 2026 (for transactions conducted in 2025), crypto platforms must provide a standardized 1099 form, similar to those sent by banks and traditional brokerages.
In addition to simplifying tax payments for crypto, the IRS aims to combat 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 specifically apply to “custodial” platforms, such as Coinbase, which take possession of customer assets. Following lobbying efforts 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, celebrated the 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.
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