US Infrastructure Law’s Reporting Requirements for Crypto Brokers Likely to Face Delay

The provision would require brokers to collect detailed information on their customers and their trades.

AccessTimeIconJun 29, 2022 at 5:40 p.m. UTC
Updated Jun 29, 2022 at 8:04 p.m. UTC

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

Hotly debated reporting requirements for crypto exchanges and brokers included in U.S. President Joe Biden’s $1 trillion infrastructure law could face a major delay.

Many in the crypto industry have pushed back against the reporting provision in the infrastructure law, claiming that the law’s definition of “broker” is overly broad, and could theoretically be applied to crypto miners and decentralized protocols.

The back-and-forth over how “broker” will be defined, as well as the challenges of implementing a reporting regime, are likely to blame for the potential delay. However, no final decision has been made on whether the reporting requirements will be delayed or, if they are, how long the delay will last.

Bloomberg first reported the news.

Under the law, which was passed by Congress in November, crypto brokers would be required to collect detailed information, including customer names and addresses and capital gains or losses, on customers and their trades.

The collection requirements were initially slated to take effect in January 2023, with companies required to start sending reports to both their clients and the Internal Revenue Service (IRS) in 2024. The reporting requirements are intended to make it easier for crypto investors to do their taxes – and for the IRS to sniff out tax evasion.

The Treasury Department has been vocal about its concern over unpaid crypto taxes, which analysts have estimated as roughly 10% of all unpaid taxes – the so-called “tax gap” that has become a battle cry for Treasury Secretary Janet Yellen.

News of the delay will likely come as a relief to many companies that fit the “broker” definition, but this delay – if it even happens – is likely only temporary.

Nikhilesh De contributed reporting.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

CoinDesk - Unknown

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.