Global Developments In The Taxation And Reporting Of Digital Assets

Introduction

Just 10 years ago, only your millennial, techie cousin had ever heard of, let alone purchased, any cryptocurrency. Fast forward to 2021, and the volume of cryptocurrency transactions has grown to $15.8 trillion.[1] Given the momentous growth in cryptocurrency and other digital asset transactions, it is no surprise that governments are playing catch up in their efforts to regulate and provide guidance in this area. While back in 2014 the Internal Revenue Service (the IRS) issued its first guidance, which it expanded in 2019, 2021 saw increased governmental focus on the industry, particularly in light of the opportunities for tax evasion unique to transactions occurring "on-chain" (i.e., recorded on a blockchain protocol).