How does the IRS define a crypto broker?
The definition of the term “broker” includes individuals or entities that regularly provide services to carry out digital asset transfers. This definition ensures that only those truly “in a position to know” transaction details are subject to Form 1099-DA reporting requirements.
These US Internal Revenue Service rules are built on prior rulemaking (T.D. 10000) from July 2024 and focus on extending broker reporting obligations to decentralized finance (DeFi), which involves digital asset transactions without a traditional intermediary.
T.D. 10021 introduces the term “digital asset middleman,” which the IRS previously delayed due to its complexity and controversy.
The broker reporting mandate originates from the 2021 Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law. It expanded existing broker reporting obligations under Sections 6045 and 6045A to include digital assets. The provision is projected to generate