Crypto regulation in the world: weekly digest #103
USA
The U.S. Department of the Treasury's Internal Revenue Service (IRS) has introduced the new regulations for brokers of digital assets, including exchanges and payment processors, to report gross proceeds on the sale of digital assets beginning in 2026 for all sales in 2025. They will also report information on the tax basis for certain digital assets starting in 2027 for sales in 2026. The IRS has introduced a new tax reporting form, Form 1099-DA, to simplify tax calculations for crypto users and facilitate compliance. Brokers will send these forms to both the IRS and the digital asset holders to support their tax preparations.
The regulations include stablecoins, such as Tether (USDT) and Circle Internet Financial's (USDC), and high-value non-fungible tokens (NFTs), although the IRS has refused to settle the debate over whether tokens should be considered securities or commodities.
The Treasury Department and IRS have delayed rules for non-custodial brokers, such as decentralized exchanges, until later this year. These companies will be required to report information on the movements and gains of customers' assets. Also, real estate transactions paid for with cryptocurrencies will need reporting after January 1, 2026. «Real estate reporting persons» will have to file the fair market value of the digital assets used in any such transaction.
The regulations aim to combat tax evasion among cryptocurrency users and align the tax obligations for cryptocurrencies with the reporting requirements for brokers handling other financial instruments like stocks and bonds. The new rules are part of the Infrastructure Investment and Jobs Act, which was projected to generate around $28 billion in revenue over the next ten years. The regulations were developed after reviewing over 44,000 comments on the proposal and adjusting the rules to ease some burdens on brokers.
The new crypto tax reporting rules introduced by the Treasury and IRS aim to simplify tax calculations for crypto users and reduce tax evasion. The regulations will be implemented in phases, starting with transactions in 2025 for the 2026 tax season, and will require brokers to report additional details on the sale and exchange of digital assets. These rules are going alongside with similar global reporting framework – CARF – that was introduced by OECD last year and already link many jurisdictions in their efforts to minimize the risks of tax evasion in crypto.
The EU
This week the European Banking Authority (EBA) has issued new guidelines on the «travel rule» for transfers of funds and certain crypto-assets. The guidelines specify the information that should accompany a transfer of funds or crypto-assets to help tackle money laundering and terrorist financing. They also list the steps that payment service providers (PSPs), intermediary PSPs, crypto-asset service providers (CASPs), and intermediary CASPs should take to detect missing or incomplete information, and what they should do if a transfer lacks the required information.
The guidelines state that the travel rule obligations apply to transfers of funds or crypto-assets that exceed 1,000 EUR (or the equivalent in another currency). For transfers below the 1,000 EUR threshold, they outline simplified due diligence measures that payment service providers (PSPs) and crypto-asset service providers (CASPs) can apply. They also address the treatment of "linked transfers" - a series of transfers that individually are below the 1,000 EUR threshold, but which cumulatively exceed it. In such cases, the full travel rule requirements would apply.
The objective is to establish a consistent and effective approach to implementing the travel rule across the EU, allowing authorities to fully trace such transfers to prevent, detect or investigate money laundering and terrorist financing.
The guidelines were issued in response to Regulation (EU) 2023/1113, which extended the travel rule obligation to CASPs and brought the EU's legal framework in line with the Financial Action Task Force (FATF) standards and will be applied from 30 December 2024, repealing the previous Joint Guidelines under Article 25 of Regulation (EU) 2015/847.
Argentina
Bitcoin Argentina, a non-governmental organization, has proposed a new cryptocurrency law in Argentina to provide a clear legal definition for digital assets. The proposed law aims to establish a regulatory framework for cryptocurrencies and blockchain technology in the country.
The proposal comes as Argentina's cryptocurrency regulations remain fragmented, with the government taking a mixed approach towards digital assets. While Argentina does not outright ban cryptocurrencies, the central bank prohibits banks from offering crypto trading services to clients. However, some local governments in Argentina, such as Mendoza province and Buenos Aires, have adopted more crypto-friendly policies by accepting tax payments in stablecoins.
The proposed law by Bitcoin Argentina's ONG seeks to provide legal clarity on the status of cryptocurrencies and enable further adoption of digital assets in the country. It represents an effort to bring cohesive regulation to the fragmented cryptocurrency landscape in the country. If enacted, the new law could help facilitate greater mainstream adoption of digital assets in Argentina.
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