IRS spares crypto miners and validators in new broker reporting requirements

Individuals who only engage in distributed ledger validation, including miners and stakers, are exempt from broker requirements, Treasury officials said

article-image

Castleski/Shutterstock modified by Blockworks

share

The US Treasury Department has released its highly-anticipated proposed regulations for cryptocurrency brokers. Notably, it has chosen to exempt individual validators and miners. 

The Treasury alongside the Internal Revenue Service introduced the proposed regulations on Friday as stipulated by the 2021 Infrastructure Investment and Jobs Act. The agencies suggest defining digital asset “brokers” as “trading platforms, digital asset payment processors, certain digital asset hosted wallet providers, and persons who regularly offer to redeem digital assets that were created or issued by that person.” 

Individuals who only engage in distributed ledger validation, including miners and stakers, are exempt from broker requirements, Treasury officials told members of the press. 

Under the proposed rules, crypto brokers will have to adhere to the same rules as securities brokers, including filing information returns and furnishing payee statements for all customers and traders. 

The Treasury is also calling for brokers to provide a new Form 1099-DA, a special form for reporting non-employment income from digital assets, to all customers and clients, in an effort to help taxpayers manage their tax obligations. 

The Treasury stated that the proposed changes aim to curb crypto tax evasion and prevent crypto investors and businesses from gaining an unfair advantage. The Biden Administration has said there is as much as $18 billion left on the table from crypto investors taking advantage of “loopholes” in the tax code. 

The proposed rules come about four months before the agency’s Dec. 31, 2023 deadline to submit, as mandated by Congress. 

Earlier this month, a group of Democratic senators urged the two agencies to pick up the pace, arguing that the Treasury and IRS  “are at risk of failing to meet their congressionally-mandated deadlines for implementation of a final rule,” per the letter signed by Sen. Elizabeth Warren, D-Mass., and others. 

The rules, if passed, would go into effect in 2026, for the 2025 tax year. 

The public comment period for the proposed rules is open until Oct. 30, 2023. A public hearing has been scheduled for Nov. 7, 2023, and if needed will extend to Nov. 8 to accommodate additional requests to speak. The deadline to request to speak at the hearing is Oct. 30.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

Judge Analisa Torres said the parties have not demonstrated that vacating her prior ruling is in the best interest of the public

article-image

Prediction markets have found a mainstream fit

article-image

Money for enemies isn’t fun, but crypto can be

article-image

Onchain SOL perps wiped $31 million, outpacing CEX volumes two days in a row

article-image

Fed Chair Jerome Powell told Senators Wednesday that the timeline on lowering interest rates is up in the air

article-image

Credit infrastructure DeFi protocol Grove makes allocation into a CLO segment “ripe for movement into DeFi”