Crypto
US Treasury Department Formulates New Set of Rules for Crypto Brokers; Community Reacts
The US Treasury and IRS working on new crypto broker rules to enhance tax compliance and mitigate risks. Public input sought until Oct 30, 2023.
The US Treasury Department and IRS (Internal Revenue Service) are collaborating to carve out a new set of rules and regulations for crypto brokers. For now, both departments have been focusing on formulating the rules focused on the reporting of the transactions of the digital assets.
Biden-Harris administration is devoted to filling the gaps regarding tax compliance and coping with the risk factors. Moreover, it is going to look after the increasing tax-associated risks for brokers of digital assets. Upon which people were asked to comment on the proposed draft of rules and regulations till the 30th of October 2023.
Overview of the Draft
The foremost rule of the draft was to make it compulsory for the brokers to report the details of sell and purchase of digital assets. This would put them in a standard line fulfilling the financial regulations and instrumentation like bonds and stocks. US Department of Treasury assured that following the carved rules would simplify the tax calculation and emphasized on issuing the Form 099-DA.
Also Read: Atomic Wallet Goes Through Lawsuit Due to Losses of $100M in a Crypto Hack
IRS and US Treasury Department also disclosed the date for the implementation of the new rules. If these rules are accepted by the majority, proper reporting of digital assets will be initiated from 2026 to cover the reporting of the transactions carried out in 2025. It was disclosed that this framework is able to yield around $28 billion in the next 10 years.
Community’s Response
US Treasury Department and IRS has decided to discuss the draft on 7th and 8th of November 2023. Both departments have decided to consider the community’s response to be affected from the recently proposed agenda. Several tax payers and other community members have recorded their response in this regards and shared vita tweets which are given below.Â
Proposed treasury regs for crypto asset 'brokers' just dropped and do indeed explicitly characterize various persons involved in DeFi (including operators of websites that communicate with wallets) as brokers . I'll need to dig in more but it looks pretty bad. pic.twitter.com/uuc6LI3j5I
— _gabrielShapir0 (@lex_node) August 25, 2023
Treasury just released a confusing and self-refuting proposal pursuant to a new definition of "broker" passed in August 2021.
— Miller (@millercwl) August 25, 2023
As feared, it strains to find non-existent financial intermediaries in crypto—including DAOs and certain wallet providers—or to create them… https://t.co/6D3NJ1UpGJ
There are good weeks and bad weeks in crypto policy.
— Jake Chervinsky (@jchervinsky) August 25, 2023
This week, DOJ and Treasury reminded us of a sad but unsurprising truth: our effort to manifest the right to privacy through code will be met with fierce resistance.
It was a bad week, but that's okay.
In the end, we win ✊
Comment period for broker-dealer customer protection rule amendments closes soon 🧾
— Gary Gensler (@GaryGensler) August 25, 2023
I believe customers would benefit if broker-dealers carrying large credit balances made daily reserve account calculations & deposits.
Who are these certain broker dealers?
— Wendy O (@CryptoWendyO) August 25, 2023
Why isn’t it transparent who is required to do so? pic.twitter.com/Gs3XKBIhMe
