US Treasury and IRS Propose New Regulations for Cryptocurrency Brokers, Aim to Improve Compliance and Clarity
Summary:
The US Department of the Treasury and the IRS have proposed new regulations for cryptocurrency brokers. Brokers will be required to report sales and exchanges of digital assets and provide information on gains and losses. The aim is to improve compliance and provide clarity on income earned from cryptocurrencies. The regulations are open for public input and will require brokers to file information returns and provide statements to customers. The need for stricter regulations in the crypto space has also been highlighted by the US Government Accountability Office (GAO).
The US Department of the Treasury and the Internal Revenue Service (IRS) have jointly released a proposal outlining new regulations for brokers in the cryptocurrency industry. The regulations, if implemented, will require digital asset brokers such as trading platforms and payment processors to report gross proceeds from the sale or exchange of digital assets starting January 1, 2025. Additionally, brokers will be required to provide information on gains and losses incurred during the sale of crypto assets, starting on or after January 1, 2026. These regulations aim to improve taxpayer compliance and provide clarity on income earned from cryptocurrencies. The Treasury Department and the IRS are seeking input from small businesses on the impact of the regulations and will hold a public hearing on November 7, 2023. Once passed into law, brokers in the US will be required to file information returns with the IRS using the new Form 1099-DA and provide payee statements to customers. The US Government Accountability Office (GAO) has also recently highlighted the need for stricter regulations in the cryptocurrency space, particularly in overseeing spot markets for nonsecurity crypto assets. The report suggests that designating a federal regulator to provide comprehensive oversight could mitigate financial stability risks and ensure user protections.
Published At
9/7/2023 8:05:00 AM
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