The US Internal Revenue Service (IRS) has extended the period for comments on the proposed crypto tax reporting requirements till November 13, 2023. The new rules are expected to come into force in 2026. The initial period for comments was August 2023.
On August 29, the IRS issued guidelines titled “Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions” for the public. Brokers will be required under the legislation to use a unique reporting form in order to simplify tax submissions and lower instances of tax evasion.
According to a statement from the US Treasury Department, the proposed Form 1099-DA would “help taxpayers determine if they owe taxes, and avoid having to make complicated calculations or pay for digital asset tax preparation services to file their tax returns.” Sales and exchanges made in 2025 will be impacted when the new laws take effect in 2026.
The crypto community hasn’t warmly received the proposed regulations. Miller Whitehouse-Levine, CEO of DeFi Education Fund, described them as “confusing, self-refuting, and misguided,” while Kristin Smith, CEO of the Blockchain Association, emphasised how distinct the cryptocurrency environment is from conventional finance.
Coinbase says the Securities and Exchange Commission’s (SEC) definition of an investment contract isn’t in line with US securities laws. It argued in its motion to dismiss an SEC lawsuit, arguing that it exceeded its authority when it classed cryptocurrencies as securities.
Coinbase criticised the SEC in a document filed in a New York District Court on October 24, stating that the regulator does not have jurisdiction over the cryptocurrencies it offers and that its definition of what constitutes a security is “too broad”.
“The SEC’s authority is limited to securities transactions. Not every parting of capital with a hope of gain qualifies, and trades over Coinbase are only securities transactions if they involve ‘investment contracts.’ The transactions at issue here do not,” it said in the document.
According to Coinbase, the SEC has taken on a “radical expansion of its own authority” and asserted control “over essentially all investment activity,” both of which are things that only Congress is permitted to do in accordance with the concept of the major questions.
Paul Grewal, chief legal officer at Coinbase, echoed the assertions in an October 24 X post and stated that the SEC's criteria have “no limiting function at all”.
Blockchain technology can trace the digital ownership of any asset, encouraging the development of gold-backed tokens and making investing in gold easier and more accessible globally. Gold-backed tokens are anchored to the current price of gold, just like stablecoins Tether and USD Coin are to the US dollar. The prospect of gold-backed cryptocurrencies has encouraged the entry of traditional gold corporations into Web3. The launch of the gold-backed Precious Metals Bullion (IPMB) coin and the associated Globally exchanged Metal (GeM) nonfungible token (NFT) by the International Precious Metals (IPM), a group of precious metals experts with over 250 years of combined industry experience, indicate their interest.