Recent developments in Treasury's crypto broker reporting
regulations have ignited heated debate across the digital asset
community. At the heart of the controversy lies a significant
overreach: Treasury's expanded definition of
“broker” now includes entities like informational
websites, platforms with "connect wallet" features, and
other services that merely provide users with data they can use to
transact on blockchain networks. This interpretation, codified in
TD 10021, has drawn sharp criticism for its legal overextension and
potential to stifle innovation in the burgeoning crypto sector.
The Legal Framework
Under Section 6045 of the tax code, brokers are required to
report sales of securities and other assets on Form 1099. The
Infrastructure Investment and Jobs Act amended this section to
include “any person who (for consideration) is responsible
for regularly providing any service effectuating transfers of
digital assets on behalf of another person.”
