Starting in 2025, centralized exchanges will be required to report all cryptocurrency transactions of their users to the U.S. Internal Revenue Service (IRS).
The IRS has announced the introduction of a new mandatory reporting system for digital asset transactions, set to take effect in 2025.
The most significant change affects centralized exchanges such as Coinbase, Kraken, and Gemini, which will need to report all user buy and sell transactions using a new form called 1099-DA.
The implementation plan includes a gradual rollout of the new rules: while basic transaction reporting will begin in 2025, intermediaries will also need to provide detailed information on the purchase price of digital assets starting in 2026. For non-custodial wallets and decentralized platforms like Uniswap, the rules will not take effect until 2027.
Kell Canty, CEO of Ledgible, clarified:
“This is not a new tax on digital asset investors. It is rather a new tax compliance mechanism to ensure the proper payment of taxes owed.”
The U.S. Treasury Department emphasized that the new 1099-DA form will serve as a reminder to digital asset holders that their transactions are subject to taxation.
Particular attention is also being given to spot Bitcoin ETFs. As Jessalyn Dean, vice president of Ledgible, explained, ETF providers will already be required this year to issue their clients a 1099-B or 1099-DA form. Reporting will include not only proceeds from share sales but also any taxable events within the fund itself, such as the annual sale of part of the asset to cover management fees.
According to the IRS website, the requirement will primarily apply to “brokers who take possession of the digital assets sold by their clients,” including custodial trading platforms, certain custodial wallet providers, and some crypto payment processors.
The mechanism is similar to that already used for other income types: the information on the 1099-DA form must be included in the 2025 tax return, just as is done for dividends, interest, and capital gains.
