The US Department of the Treasury and the Internal Revenue Service (IRS) have released a proposal for cryptocurrency laws regulating brokers’ reporting obligations. This proposal comes after the United States Government Accountability Office (GAO), a Congressional watchdog agency, released a 77-page report emphasizing the need for stricter crypto regulations.
Cryptocurrency brokers are referred to as “digital asset middlemen” in the regulatory proposal and will be subject to providing information on gains and losses incurred during the sale of crypto assets. The proposed regulations are expected to result in “higher levels of taxpayer compliance”. The regulations would require US-based brokers to file information returns with the IRS using the new Form 1099-DA and to provide payee statements to customers. The rules are proposed to take effect on or after January 1, 2026.
To discuss how the restrictions might affect small businesses in the United States, the Treasury Department and the IRS have invited them to a public hearing scheduled for November 7, 2023.
The GAO also shared a report and video about the potential of blockchain technology, such as cryptocurrency, for faster and cheaper financial transactions. However, they pointed out that recent price crashes and bankruptcies have raised concerns about gaps in federal regulations that could put consumers at risk.