The digital asset question is now required on Form 709 (gift tax return), expanding the scope of returns that must include the question.
Before
Taxpayers had to answer the digital asset question on a list of returns that did not include Form 709.
After
Taxpayers must now also answer the digital asset question on Form 709, the United States Gift (and Generation‑Skipping Transfer) Tax Return.
Source: IRS — Crypto Broker Reporting (Form 1099-DA)
View original source →What this means for you
Centralized Exchange
Doesn't applyWhy this matters
Form 709 is a tax return filed by individual taxpayers to report gifts, not by corporate entities. As a CEX, the company is the platform facilitating transfers, not the taxpayer reporting personal gifts to the IRS.
DeFi Protocol
Doesn't applyWhy this matters
The regulatory change applies to individual taxpayers filing gift tax returns (Form 709) with the IRS. As a fully decentralized protocol with no operator, owner, or controlling party, the protocol is not a taxpayer and does not file tax returns.
Custodian
Doesn't applyWhy this matters
The regulatory change applies to individual taxpayers filing Form 709 gift tax returns. As a custodian, the company holds assets for clients but is not the taxpayer responsible for filing personal gift tax returns.