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

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

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.

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

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

The derivatives giant will extend futures and options access to round-the-clock trading in early 2026

by Blockworks /
article-image

Global fiber network goes live as SEC clears 2Z token for utility use

by Blockworks /
article-image

The SPAC transaction positions Avalanche Treasury Co. as a Nasdaq-listed vehicle for institutional AVAX exposure by 2026

by Blockworks /
article-image

The collaboration brings regulated money market fund exposure to Polygon, with custody provided by Standard Chartered

by Blockworks /
article-image

FG Nexus teams with Securitize to bring its Nasdaq-listed equity onchain, offering tokenized stock trading through Ethereum

by Blockworks /
article-image

Sponsored

Taiko launches binding onchain governance and appoints three directors with expertise in global regulation, business strategy and blockchain tech

by Sponsored /