The U.S. Department of the Treasury has recently released a nearly 300-page proposed rule that explicitly defines “brokers” in the cryptocurrency industry, addressing years of uncertainty regarding tax reporting. Under the new regulations, cryptocurrency exchanges (CEXs), payment processors, certain custodial wallet providers, some DEXs, and individuals or entities who redeem issued cryptocurrencies will be required to fulfill tax reporting obligations. The proposed rule also introduces a new tax form for the newly designated brokers, resolving confusion over the applicable tax forms.
The proposed rule is currently in the proposal stage, with the government collecting public comments until October 30th, followed by a series of public hearings on November 7th and 8th. The industry has time until the 2025 tax year to lobby federal officials to determine the final rules. This initiative aims to narrow the tax gap, address tax evasion risks posed by digital assets, and ensure that all participants adhere to the same tax regulations.