The United States Internal Revenue Service (IRS) has issued final regulations requiring brokers, including DeFi platforms, to report digital asset transactions.
Stricter Reporting Rules
Starting in 2027, brokers must report gross proceeds from the sale of digital assets and provide detailed information about taxpayers involved in these transactions. While not all DeFi platforms are directly impacted, those serving as trading front-ends or exercising significant control over transaction processes will now fall under the 'broker' category. This includes platforms or even groups of individuals acting as intermediaries, regardless of their operational structure or legal entity status.
Implications for DeFi and Taxpayer Transparency
The regulations will begin applying to digital asset transactions in 2027, with brokers required to start collecting relevant data by 2026. The IRS estimates that between 650 and 875 DeFi brokers will need to comply with the new rules. These platforms are expected to facilitate greater transparency by providing users with detailed transaction data, akin to what traditional custodial brokers already offer.
Changes in the Crypto Industry
The potential impact is significant, with the IRS estimating that up to 2.6 million taxpayers will be affected. By mandating this level of reporting, the agency aims to curb tax evasion and ensure that income from digital asset transactions becomes more transparent.
This move underscores the growing scrutiny of the cryptocurrency sector as regulators aim to close loopholes and integrate digital finance into the broader financial ecosystem.
