LEGAL DISCLAIMER
Important Notice: This information is for educational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex, and everyone's situation is unique. The information provided here is based on current IRS regulations as of November 2025 and is subject to change.
This article provides general information about tax reporting requirements and should not be relied upon as tax advice. Please consult a qualified tax professional, certified public accountant (CPA), or tax attorney for advice specific to your personal circumstances and tax situation.
This content is designed to help you understand new reporting requirements, but you remain responsible for ensuring compliance with all applicable tax laws.
For official IRS guidance, please visit www.irs.gov or consult IRS Publication 544 and the instructions for Form 1099-DA at www.irs.gov/Form1099DA.
What's Changing with Crypto Taxes in 2025?
If you've been trading cryptocurrency with us, you might have noticed we're asking for some additional information this year. Don't worry - this isn't random, and you're not in trouble! Here's what's happening and what it means for you.
The Big Picture
Starting January 1, 2025, the IRS introduced new tax reporting rules for cryptocurrency exchanges. Think of it like this: for years, your stock broker has sent you tax forms showing your trades. Now, crypto exchanges like us are required to do the same thing.
This change comes from federal regulations issued by the Treasury Department and IRS in June 2024, implementing provisions of the Infrastructure Investment and Jobs Act of 2021. The goal? To standardize how cryptocurrency transactions are reported, making it easier for everyone to stay compliant with tax laws.
What's Actually Changing?
The IRS is launching a new tax form called Form 1099-DA (Digital Asset Proceeds From Broker Transactions). This form is specifically designed for cryptocurrency and digital asset transactions.
Right Now (2025)
We're required to collect your tax information using IRS Form W-9
We're tracking all your crypto transactions throughout the year
We must report your gross proceeds (total sales) to the IRS
For 2025 trades, cost basis reporting is optional (but we may include it to help you)
Starting in 2026 (for your 2025 trades)
You'll receive Form 1099-DA in early 2026 (by February 17, 2026) covering your 2025 trades
This form will show details about your crypto sales and exchanges
The IRS will receive a copy too, just like with other investment forms
You'll use this form to complete your tax return
Starting in 2026 (for future trades)
Beginning with cryptocurrency purchased in 2026 and later, we will also be required to report cost basis (what you originally paid)
This will make calculating your capital gains and losses even easier
Why Is This Happening Now?
The IRS recognizes that cryptocurrency trading has become mainstream, but tax reporting has been inconsistent. Unlike stocks, which have standardized reporting through Form 1099-B, crypto transactions have not had a uniform reporting system - until now.
The goal is threefold:
Help you file accurate tax returns with clear documentation
Improve tax compliance across the industry
Level the playing field between traditional investments and digital assets
Why This Actually Matters to You
The Good News:
Easier tax filing – You'll have a clear, official record of your trades instead of trying to piece together information from multiple sources
Less guesswork – You won't need to manually calculate every transaction
One standardized form – Similar to what stock investors have used for decades
Professional acceptance – Tax software and tax preparers will know exactly how to handle it
What You Need to Know:
This does NOT create new taxes: You have always been required to report crypto trades on your taxes
This does NOT change what's taxable: The tax treatment of crypto remains the same
This DOES make reporting more straightforward and transparent
This DOES mean the IRS will have better visibility into crypto transactions
What You Need to Do
The good news is that we are handling most of the heavy lifting. Here's what we need from you:
Step 1: Submit Your W-9 Form (If You Haven't Already)
We're required by law to collect IRS Form W-9 from all customers. This form provides:
Your full legal name
Your taxpayer identification number (usually your Social Security Number)
Your address
Your tax status
Why we need it: Without this information, federal law requires us to withhold 24% of your transaction proceeds as "backup withholding" and send it directly to the IRS. Nobody wants that!
How to submit: Log into your account and complete the secure W-9 form in your settings. It takes about 2 minutes.
Step 2: Keep Trading as Normal
Nothing changes about how you use our platform. We're tracking your transactions behind the scenes to generate your 1099-DA form.
Step 3: Watch for Your 1099-DA in Early 2026
When you're preparing your 2025 tax return (filed in early 2026), you'll receive your 1099-DA form from us by February 17, 2026. Your tax software or tax professional will know exactly what to do with it.
What Hasn't Changed
It's important to understand what's not changing:
Crypto is still taxed the same way: The tax treatment of cryptocurrency hasn't changed. Selling, exchanging, or using crypto for purchases can create taxable events, just like before.
You're still responsible for reporting: Even if you don't receive a 1099-DA (for example, if you trade on non-reporting platforms), you're still required to report all crypto transactions on your tax return.
Staking rewards, airdrops, mining: These types of crypto income may not appear on your 1099-DA but are still taxable and must be reported. Check with your tax professional about how to report these.
Special Note About Stablecoins
If you trade stablecoins (like USDC or USDT), there are special reporting rules. For 2025:
If your total stablecoin sales are under $10,000 for the year, we're not required to report them separately on a 1099-DA
If your total stablecoin sales are $10,000 or more, we'll report them in aggregate (as a total) on your 1099-DA
Important: Even if your stablecoin trades don't appear on a 1099-DA because they're under the threshold, you still must report them on your tax return. The $10,000 threshold affects our reporting requirement - not your reporting requirement.
Timeline: What Happens When
Now through December 31, 2025:
Submit your W-9 if you haven't already
Trade normally on our platform
We track all transactions
January 1 - February 17, 2026:
We prepare your 1099-DA form
We file it with the IRS
We can download your copy
February - April 2026:
You receive your 1099-DA
You use it to prepare your 2025 tax return
You file your tax return by April 15, 2026
Transitional Relief for 2025
The IRS recognizes that 2025 is the first year of this new reporting system. As such, they've provided some transitional relief:
Penalty relief: The IRS won't impose penalties on brokers who make good-faith efforts to comply, even if there are minor errors
Simplified reporting: For 2025, only gross proceeds reporting is mandatory (cost basis is optional)
Backup withholding relief: There are certain situations where backup withholding requirements are relaxed for 2025
This means the first year may have some growing pains, but both exchanges and taxpayers have some flexibility as everyone adjusts to the new system.
Common Misconceptions
Myth: "If I don't get a 1099-DA, I don't have to report my crypto trades."
Reality: You must report all sales, exchanges and certain other crypto transactions on your tax return, whether you receive a form or not. The 1099-DA is a helpful tool, but it doesn't determine your reporting obligation.
Myth: "This means I'll pay more taxes on crypto."
Reality: The tax treatment of crypto hasn't changed. You've always owed taxes on crypto gains. This just makes reporting easier and more transparent.
Myth: "Small trades don't matter."
Reality: All cryptocurrency sales, exchanges, and dispositions are taxable events, regardless of the dollar amount. There's no minimum threshold for your reporting obligation (though there are thresholds for what we must report).
Myth: "I can avoid this by using decentralized exchanges."
Reality: You're still required to report all crypto transactions on your tax return, even if they occur on platforms that don't issue 1099-DAs. The reporting requirement applies to you, not just to exchanges.
How This Compares to Stock Trading
If you've ever invested in stocks, this system will feel familiar:
Stocks | Cryptocurrency |
Form 1099-B | Form 1099-DA |
Reports sales & proceeds | Reports sales & proceeds |
Includes cost basis (for covered securities) | Will include cost basis (starting 2026 for assets acquired after 2025) |
Filed by brokers | Filed by exchanges |
Used to complete Form 8949 & Schedule D | Used to complete Form 8949 & Schedule D |
The main difference is timing: stock brokers have been doing this for decades, while crypto exchanges are just starting in 2025 with a new form.
Questions to Consider
As you prepare for these changes, think about:
Have you submitted your W-9? If not, do it now to avoid backup withholding.
Do you trade on multiple exchanges? You'll receive a separate 1099-DAs from each platform.
Do you keep good records? While the 1099-DA will help, you should still maintain your own records of purchases, sales, and transfers.
Do you have a tax professional? Consider consulting with a CPA or tax professional who understands cryptocurrency taxation.
The Bottom Line
These changes might seem overwhelming at first, but they're designed to make your life easier at tax time. You've always been required to report your crypto trades on your taxes—now you'll just have an official form to help you do it accurately.
The most important things to remember:
✅ Submit your W-9 form to avoid complications
✅ Keep trading as you normally would
✅ Watch for your 1099-DA in early 2026
✅ Use the form to complete your tax return
✅ Consult a tax professional if you have questions
We're here to help you navigate these changes. While we can't provide tax advice.
Additional Resources
For more information, see our other articles in this series:
"Why We're Asking for Your Tax Information (W-9 Explained)"
"Your 1099-DA: What to Expect in 2026"
"Understanding Multiple 1099-DAs and Stablecoins"
"Common Questions About Crypto Tax Reporting"
For official IRS guidance:
IRS Form 1099-DA Instructions: www.irs.gov/Form1099DA
IRS Digital Asset Information: www.irs.gov/businesses/small-businesses-self-employed/digital-assets
IRS Publication 544 (Sales and Other Dispositions of Assets): www.irs.gov/Pub544
Still have questions? While we can't provide tax advice, our customer support team can help with technical questions about submitting your W-9 or accessing your 1099-DA when it's available. For tax-related questions, please consult a qualified tax professional.