With the passage of the Infrastructure Investment and Jobs Act, the U.S. federal government has introduced new tax reporting requirements for cryptocurrency transactions, categorizing digital asset trading platforms as "brokers" and mandating them to report trading data like traditional brokerages. This transformation presents significant operational and compliance challenges for crypto exchanges.
Coinbase points out that the trading structure of the crypto market differs fundamentally from that of the traditional financial system. Users often transfer assets between multiple wallets and platforms, making it difficult for trading platforms to obtain complete cost basis information, which complicates accurate profit and loss calculations. This can result in tax reports that are unclear and may mislead users in their filings.
To alleviate the pressure of system upgrades, the IRS has finalized the new rules for 2024, requiring custodial exchanges to report total trading revenue starting from 2025. However, the complete reporting of cost basis will be implemented in phases, initially allowing platforms to report only trading amounts without the immediate obligation to calculate gains or losses, providing the industry with a technical adaptation window.
It is noteworthy that the current rules primarily apply to centralized exchanges, while decentralized finance (DeFi News) platforms, which were previously discussed for inclusion in the regulatory framework, have been removed from the final regulatory scope and are not required to bear reporting obligations.