Coinbase Urges Crypto Community to Oppose Proposed Tax Reporting Regulations
Paul Singh Grewal, the chief legal officer of Coinbase crypto exchange, is calling on the crypto community to rally against the United States Treasury’s proposed tax reporting regulations for cryptocurrencies. Grewal argues that these regulations could set a dangerous precedent for surveillance and urges the community to oppose them.
Grewal took to X (formerly Twitter) to express his concerns about the proposed crypto tax reporting rules. He believes that these regulations go beyond what is necessary to establish tax reporting rules and warns that if they become law, they could harm the digital asset industry, which is still in its early stages.
The U.S. Internal Revenue Service (IRS) recently released a draft of proposed regulations for crypto tax reporting. These rules would require crypto brokers to use a new form to simplify tax filing and reduce tax fraud. The regulations would apply to both centralized and decentralized exchanges, crypto payment processors, online wallets, and crypto brokers.
The U.S. Treasury Department argues that the new form would make it easier for taxpayers to determine if they owe taxes, eliminating the need for complex calculations or expensive digital asset tax preparation services. If approved, the new tax regime would take effect in 2026, with brokers required to start reporting 2025 transactions in January 2026 using Form 1099-DA.
Coinbase Legal Officer Disagrees with Treasury Department
Grewal disagrees with the Treasury Department’s claim that these regulations align digital assets with traditional financial reporting. He argues that the proposed rules would create a “dangerous precedent for surveillance” by requiring almost every digital asset transaction to be reported, including small purchases like a cup of coffee.
Grewal also raises concerns about the significant amount of user data that would be collected under these regulations. He believes that this data collection serves no legitimate public purpose and would burden Web3 startups with costly requirements while overwhelming the IRS with more data than they can effectively analyze.
Hot Take: Crypto Community Urged to Stand Against Tax Reporting Regulations
Coinbase’s chief legal officer, Paul Singh Grewal, is urging the crypto community to unite against the proposed tax reporting regulations for cryptocurrencies. Grewal argues that these regulations would set a dangerous precedent for surveillance and hinder the growth of the nascent digital asset industry. He believes that the proposed rules go beyond what is necessary for tax reporting and would burden startups with unnecessary data collection requirements. Grewal encourages everyone who cares about fairness and supports American innovation to join the opposition against these regulations.
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