CRYPTO TAX: YEAR-IN-REVIEW

By Aaron Kriss and Braeden Anderson

KEY U.S. FEDERAL AND GLOBAL DEVELOPMENTS

Since 2023, there has been a wave of significant tax and regulatory developments affecting digital assets in the United States and abroad. To help clients stay grounded amid rapid change, we’ve prepared a brief, focused review of several of the most important updates. What follows is a concise summary of the key items that matter most from a compliance and planning perspective.

1. Proposed Staking Safe Harbor for Digital Asset Investment Trusts

On November 10, 2025, the IRS issued Rev. Proc. 2025-31, which establishes a safe harbor allowing digital-asset investment trusts that qualify as investment trusts or grantor trusts under Treas. Reg. § 301.7701-4(c) to engage in staking activities without jeopardizing that status. The safe harbor applies to trusts holding proof-of-stake assets that meet specific operational requirements, including limitations on the activities of agents or service providers. Treasury stated the purpose is to provide certainty as staking becomes more common among widely held digital-asset products.

IRS, Rev. Proc. 2025-31

2. Advance Notice of Proposed Rulemaking on Stablecoins Under the GENIUS Act

On September 18, 2025, Treasury and the IRS released an Advance Notice of Proposed Rulemaking under the GENIUS Act seeking public comment on the tax treatment of certain dollar-backed stablecoins. The ANPRM raises questions regarding possible “treat-as-cash” approaches, gain/loss recognition, and information-reporting obligations. It does not establish new rules but begins a regulatory process to define core tax principles for stablecoin transactions.

U.S. Treasury / IRS, Stablecoin ANPRM (Federal Register Doc. No. 2025-18226)

3. IRS and Treasury Issue Final Regulations on Digital Asset Broker Reporting (Form 1099-DA)

On June 28, 2024, the IRS issued final regulations under IRC §§ 6045, 6045A, and 6050W, defining “digital asset brokers” and requiring them to report gross proceeds and, in some cases, basis on new Form 1099-DA. The rules apply to centralized platforms, certain wallet providers, and other intermediaries that facilitate digital-asset sales. Reporting phases in beginning after 2025 and is intended to reduce tax-gap exposure by aligning digital-asset reporting with traditional securities reporting.

Treasury and IRS Issue Final Regulations on Broker Reporting for Digital Assets

4. IRS Provides Transitional Relief for Hard-to-Classify Digital-Asset Transactions

To facilitate implementation of the broker reporting rules, the IRS also issued on June 28, 2024, Notices 2024-56 and 2024-57 and Rev. Proc. 2024-28, providing temporary relief for certain digital-asset transactions. The relief covers activities that are difficult to characterize for reporting purposes, including wrapping/unwrapping, liquidity-pool movements, and certain staking flows. These measures delay or adjust reporting obligations while Treasury continues to develop more comprehensive guidance.

Notice 2024-56

Notice 2024-57

Rev. Proc. 2024-28

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5. IRS Clarifies Staking Rewards Income Timing (Rev. Rul. 2023-14)

On July 31, 2023, the IRS issued Rev. Rul. 2023-14, concluding that staking rewards received by a cash-method taxpayer constitute gross income in the year the taxpayer gains dominion and control over the newly created units. The ruling applies regardless of whether the units were created by validating blocks or delegated staking. The ruling confirms that staking rewards are ordinary income when accessible, not capital gains.

IRS, Rev. Rul. 2023-14.

6. Tax Treatment of NFTs (Notice 2023-27)

Notice 2023-27, released on March 21, 2023, announces that the IRS intends to issue guidance on whether certain NFTs are classified as “collectibles” under IRC § 408(m). Until final regulations are issued, the IRS applies a look-through approach, treating an NFT as a collectible if it references an underlying asse, such as artwork, that would itself be a collectible. The notice serves as interim guidance to prevent inconsistent tax reporting.

Source: IRS, Notice 2023-27.

7. Wash-Sale Rules and Digital Assets (Treasury Greenbook 2025)

The FY 2025 Treasury Greenbook released by the Treasury on March 11, 2024, contained a proposal to amend IRC § 1091 to apply wash-sale rules to digital assets, citing losses claimed in transactions that would be disallowed if digital assets were treated like securities. Treasury noted that current law covers only stock and securities, leaving digital assets outside the statutory scope. The proposal would coordinate wash-sale rules with the new digital-asset broker-reporting regime to improve compliance.

U.S. Treasury, General Explanations of the Administration’s FY 2025 Revenue Proposals, pp. 224–226.

Aaron Kriss, the firm’s Managing Partner, is a seasoned tax attorney with deep experience in the core areas of federal income taxation, corporate structuring, partnerships, and transactional tax planning. His practice spans the full range of “meat-and-potatoes” tax issues that businesses encounter every day, and he is known for translating complex tax rules into practical guidance that companies can rely on.

Braeden Anderson, a Partner and the firm’s Blockchain & Digital Assets practice leader, focuses on securities enforcement, fintech regulation, and digital-asset market structure. He advises exchanges, trading platforms, blockchain projects, and financial institutions on compliance with SEC, FINRA, and other regulatory requirements.

Together, we offer clients the combination of traditional tax expertise and forward-looking regulatory insight needed to navigate the rapidly evolving digital-asset environment. For questions about any of these developments or for guidance tailored to your specific operations, we welcome you to contact us.