The US Internal Revenue Service (IRS) is proposing a rule that would require crypto exchanges to deliver tax forms to users electronically.
Under current rules, exchanges must provide paper copies of Form 1099-DA—the IRS form documenting crypto transactions from a centralized exchange or broker—if users request paper versions. The proposed regulation, due to be published Friday, would eliminate that obligation and would permit brokers to “terminate” relationships with clients who refuse electronic delivery. It would also bar users from retroactively revoking consent to receive electronic forms. The proposal is available in the Federal Register.
The IRS requires broker-dealers—platforms that provide crypto services such as exchanges—to report user proceeds from each transaction and to give users Form 1099-DA summarizing their transaction history for the tax year. For the 2025 tax year, exchanges are not required to track cost basis (the price paid for each purchase); tracking cost basis remains the investor’s responsibility. The IRS described broker reporting requirements:
“Brokers required to make these returns must include identifying information of the customer, such as the customer’s name and tax identification number (TIN), and such other relevant information, including the gross proceeds from the transaction.”
About one in five Americans—roughly 55 million people—hold digital assets in the US, according to the National Cryptocurrency Association (NCA). In the NCA’s 2025 survey of 54,000 respondents, 10% cited digital asset taxes as a barrier to adoption, and more than one-third indicated they wanted more education on crypto tax implications; 39% specifically said they wanted a better understanding of crypto taxes.
Related coverage: Crypto lobby Blockchain Association pitches tax plan to Congress.
Concerns resurfaced after the previous administration’s attempt to regulate DeFi. In December 2024, the IRS issued a rule classifying front-end services—including decentralized exchanges (DEXs) and decentralized finance (DeFi) platforms—as brokers, which would have required them to collect know-your-customer (KYC) data and report user sale proceeds. In April 2025, President Trump signed a resolution that repealed the DeFi broker rule, a move welcomed by many in the crypto industry. Still, industry leaders warn that ambiguous language in the stalled CLARITY market structure bill could reintroduce KYC reporting requirements for DeFi platforms and constrain activity in the sector.
Magazine: Clarity Act risks repeat of Europe’s mistakes, crypto lawyer warns.
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