Main content of the new regulations:
1. Brokers need to submit information reports, including total transaction revenue and other details.
Brokers are required to submit information reports to the IRS (such as Form 1099-B), including:
A. Total revenue from digital asset transactions.
B. Information of both parties in the transaction (such as identity, address).
C. For each transaction, it is necessary to record the transfer price and basis cost.
Here are several points regarding the analysis of these regulations:
Increased compliance and reporting obligations: The main goal of the new regulations is to enhance tax compliance. This means that participants in cryptocurrency transactions, especially those defined as brokers, will need to take on more reporting obligations. This may increase operational costs and could lead to a reduction in market participants or a change in their trading behavior.
Broad definition of brokers: Expanding the definition of brokers to include DeFi participants, market makers, order matching services, etc., means that more types of participants will need to comply with these new rules. This may lead to a certain degree of suppression of innovation in areas like DeFi, as participants need to consider additional compliance costs.
Market reaction: The market's reaction to these new rules may include price fluctuations, as investors may reassess their risks and returns in the cryptocurrency market. In particular, if the market believes these rules will lead to higher compliance costs or reduce the anonymity and convenience of cryptocurrencies, it may have a negative impact on prices.
Possibility of future adjustments: You mentioned that these rules "may still be adjusted in content," indicating that this may not be the final version, and there may be modifications in the future to respond to market feedback or legal challenges. This presents a certain level of uncertainty for the market, which may affect investor confidence.
Narrowing of the tax gap: By increasing reporting requirements, the IRS aims to narrow the tax gap, meaning more transactions will be subject to tax regulation, which some may view as a restriction on the free trading of cryptocurrencies.