Congress Eyes Tighter Crypto Reporting Rules to Curb Tax Evasion

U.S. lawmakers are proposing stricter reporting requirements on cryptocurrency transactions, aiming to close tax loopholes and increase transparency in the digital asset space. Under the planned changes, exchanges and platforms would need to provide more detailed data to the IRS on trades, transfers, and holdings.

Supporters argue the move is essential: current rules let many crypto participants avoid oversight, making it difficult for tax agencies to track gains and enforce compliance. The new framework would require capital gains and income from crypto to be more uniformly reported, mirroring the reporting systems already in place for stocks and real estate.

Critics warn the proposal could stifle innovation and impose heavy burdens on smaller firms and individual holders. Some say the compliance costs and privacy concerns may push activity into unregulated corners of the market. Others question the technical feasibility of tracking decentralized and cross-chain transactions.

If enacted, the legislation would represent a pivotal shift in how governments regulate digital assets — forcing crypto into the same kind of scrutiny and accountability long applied to traditional financial instruments.