A new broker reporting requirement was added, mandating brokers to file Form 1099-DA for digital asset transactions with specific effective dates.
Before
The page provided general guidance on reporting digital asset transactions by taxpayers but did not impose any explicit reporting duties on brokers.
After
Brokers must report gross proceeds for digital asset transactions after Jan. 1, 2025, report basis after Jan. 1, 2026, and comply with additional reporting rules for certain assets and broker types.
Source: IRS — Crypto Broker Reporting (Form 1099-DA)
View original source →What this means for you
Centralized Exchange
Act nowWhy this matters
As a CEX that matches trades and custodies funds, the company fits the definition of a broker responsible for reporting user transactions. Failure to implement the Form 1099-DA reporting for gross proceeds by the 2025 deadline would result in direct regulatory non-compliance.
What to do
Implement a tax reporting system capable of tracking and reporting gross proceeds for all digital asset transactions to satisfy Form 1099-DA requirements.
Deadline: Jan 1, 2025
DeFi Protocol
Doesn't applyWhy this matters
The regulatory change applies specifically to 'brokers' who facilitate transactions. As a fully decentralized protocol with no operator, owner, or custody of assets, there is no legal entity that fits the definition of a broker to whom this reporting obligation can attach.
Custodian
Doesn't applyWhy this matters
The company profile is defined as a custodian that holds assets without necessarily operating a trading venue and is not responsible for trade execution. Form 1099-DA reporting obligations apply specifically to brokers who facilitate transactions, which falls outside the defined scope of this entity's core business.