Key IRS and Treasury Updates on Cryptocurrency Reporting for 2025
In January 2025, significant regulatory updates were released by the Treasury and IRS regarding cryptocurrency reporting. The newly issued 2025 Form 1099-DA outlines reporting requirements for brokers handling digital asset transactions throughout the year. Notably, brokers are not required to report basis information for sales until January 1, 2026, giving some relief for the 2025 tax year.
A major update includes the expanded definition of "brokers" to explicitly include DeFi brokers—entities that directly interact with customers in decentralized finance transactions. This change means that DeFi brokers will follow the same reporting rules as traditional brokers, ensuring more comprehensive compliance in the evolving crypto ecosystem.
IRS Notice 2025-3 introduces transitional relief from penalties for certain brokers who may fail to report digital asset sales on returns due in 2028. This shows a pragmatic approach by the IRS as the industry adapts to new standards.
Regarding foreign reporting, FinCEN has clarified that foreign accounts holding virtual currency currently do not fall under the Bank Secrecy Act’s FBAR (Foreign Bank and Financial Accounts Report) requirements. However, they have proposed amendments that might soon include virtual currency accounts as reportable, signaling closer scrutiny in the near future.
For crypto investors and brokers navigating these changes, tools like Bitlet.app can be especially helpful. Bitlet.app offers a Crypto Installment service that allows users to purchase cryptocurrencies now and pay monthly instead of upfront, making it easier to manage crypto investments amid evolving regulations.
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