U.S. IRS Drafts New Crypto Tax Form Without Wallet Addresses or Transaction IDs

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The world of Web3 and digital assets continues to evolve rapidly, shaped by regulatory shifts, corporate expansions, and government experimentation. Among the most impactful recent developments is the U.S. Internal Revenue Service’s (IRS) release of an updated draft for Form 1099-DA, a pivotal step toward streamlining crypto tax reporting. Unlike earlier proposals that sparked privacy concerns, this new version eliminates the requirement to report wallet addresses and transaction IDs—marking a significant shift in how crypto investors will interact with tax authorities starting in 2026.

This article explores the latest global movements in cryptocurrency regulation, institutional adoption, and corporate strategy, offering insights into how these changes affect users, businesses, and the broader financial ecosystem.

Key Developments Shaping the Crypto Landscape

Coinbase Challenges CFTC’s Proposed Ban on Prediction Markets

Coinbase’s Chief Legal Officer, Paul Grewal, has publicly opposed a proposed rule by the U.S. Commodity Futures Trading Commission (CFTC) that would ban certain prediction market contracts. Grewal argues the rule lacks justification and overreaches regulatory authority. He highlights flaws in the CFTC’s broad definition of “gaming,” which could unintentionally cover events like Nobel Prize or Oscar predictions—categories historically outside the scope of commodity regulation.

The rule, approved in a May vote, aims to prohibit wagers on political and social events through registered entities. Senator Elizabeth Warren has urged swift finalization, but Coinbase and other industry leaders warn it may stifle innovation and misalign with legislative intent.

👉 Discover how regulatory clarity can unlock the next wave of crypto innovation.

Thailand Launches Digital Asset Regulatory Sandbox

In a move to foster innovation under controlled conditions, Thailand’s Securities and Exchange Commission (SEC) launched a digital asset regulatory sandbox on August 9. The initiative allows qualified providers to test new services in a supervised environment.

Eligible services include:

This sandbox model enables startups and fintech firms to experiment with novel offerings while ensuring compliance and investor protection—a balanced approach increasingly adopted by forward-thinking regulators worldwide.

Tether Plans Workforce Doubling by Mid-2025

Tether, the issuer of the world’s largest stablecoin USDT, plans to double its workforce to approximately 200 employees by mid-2025. Currently employing over 100 people across 50+ countries, Tether’s expansion follows a record $5.2 billion profit in the first half of 2024.

CEO Paolo Ardoino attributes the growth to increasing demand for blockchain-based financial infrastructure and strategic diversification beyond stablecoins.

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IRS Drops Wallet Address and TXID Requirements from 1099-DA Draft

The IRS recently released a revised draft of Form 1099-DA, designed for crypto brokers and investors to report taxable transactions. Notably, this updated version removes three controversial fields:

This refinement addresses widespread privacy concerns raised when the initial April draft surfaced. Starting in 2026, centralized exchanges like Coinbase and Kraken will issue this form to users who sell or trade cryptocurrencies, simplifying tax reporting while reducing data exposure risks.

The streamlined format aims to improve user experience without compromising tax compliance—a win for both regulators and taxpayers.

Tether CEO Warns MiCA Poses Systemic Risk to Banking

Paolo Ardoino has also voiced strong concerns about the European Union’s Markets in Crypto-Assets (MiCA) regulation. While intended to bring stability to digital finance, he warns that MiCA’s requirement for stablecoin issuers to hold at least 60% of reserves in EU bank accounts could create systemic vulnerabilities.

“Banks operate on fractional reserves,” Ardoino noted, referencing the 2023 Silicon Valley Bank collapse as a cautionary tale. Concentrating large stablecoin reserves in traditional banking systems may amplify contagion risks during financial stress—potentially undermining the very stability MiCA seeks to ensure.

SEC Delays Decision on Hashdex Nasdaq Crypto Index ETF

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on the Hashdex Nasdaq Crypto Index ETF until September 30, 2024. The delay allows more time to evaluate the proposed rule change and address outstanding questions about market structure, custody, and investor protection.

This extension reflects the SEC’s cautious approach to approving spot crypto ETFs beyond Bitcoin and Ethereum, particularly those tracking broader indices.

California City Launches Official Bitcoin Office

The city of Santa Monica, California, has launched a dedicated "Bitcoin Office" on its official website. The initiative aims to:

This move underscores growing municipal interest in blockchain technology and digital assets as tools for economic development—a trend seen in cities like Miami and New York.

👉 See how cities are embracing blockchain to drive innovation and growth.

SEC Resolves $40M Crypto Revenue Fraud Case with Ideanomics

The SEC reached a settlement with Ideanomics over allegations of $40 million in fraudulent crypto-related revenue reporting between 2019 and 2021. As part of the agreement:

The case highlights ongoing scrutiny of financial disclosures involving digital assets.

KPMG: Hong Kong Prioritizes Virtual Currency and RWA Tokenization

According to KPMG’s Fintech Pulse Report, major financial hubs like Hong Kong, Singapore, and Japan are accelerating efforts to develop virtual currencies and tokenize real-world assets (RWAs). These jurisdictions aim to balance innovation with robust regulation.

Hong Kong specifically is advancing its status as an international virtual asset center through:

These moves signal Asia’s growing influence in shaping global crypto policy.

Celsius Sues Tether for $3.5 Billion Over Alleged Improper Liquidation

Bankrupt lender Celsius Network has filed a lawsuit against Tether, seeking $3.5 billion in damages for alleged improper asset liquidation. Celsius claims it pledged 39,542.42 BTC as collateral for a USDT loan but was liquidated without being given a chance to post additional margin after BTC prices fell.

Tether dismissed the suit as baseless and labeled it “extortion,” vowing a vigorous defense. The legal battle could set precedents for collateral management practices in decentralized finance.

CFTC Awards $1M to Whistleblower in Digital Asset Case

The CFTC awarded **$1 million** to a whistleblower whose information led to a successful enforcement action in the digital asset space. Under the Commodity Exchange Act (CEA), rewards range from 10% to 30% of sanctions exceeding $1 million.

CFTC Enforcement Director Ian McGinley praised the tipster, emphasizing the critical role whistleblowers play amid rising fraud in crypto markets.

Frequently Asked Questions (FAQ)

Q: What is Form 1099-DA?
A: It’s a new IRS tax form for reporting cryptocurrency sales and trades by brokers starting in 2026. It replaces previous ambiguous reporting standards with clearer guidelines tailored to digital assets.

Q: Why did the IRS remove wallet addresses from the form?
A: To address privacy concerns. Collecting wallet addresses raised fears of surveillance and data misuse. The revised draft focuses only on necessary tax-relevant data.

Q: How does MiCA affect stablecoin issuers outside the EU?
A: Global issuers targeting EU markets must comply with MiCA rules, including reserve requirements and auditing standards—potentially impacting liquidity strategies and risk exposure.

Q: Can municipalities legally adopt Bitcoin initiatives?
A: Yes. U.S. cities have broad authority over economic development programs. While they can’t issue currency, they can promote Bitcoin education, partnerships, and adoption.

Q: What does Tether’s workforce expansion mean for the crypto industry?
A: It signals confidence in long-term blockchain adoption and reflects growing institutional demand for stablecoins in payments, remittances, and DeFi.

Q: Is the SEC delaying all crypto ETF decisions?
A: No. While some decisions are extended (like Hashdex’s), others have been approved—such as multiple spot Bitcoin ETFs in early 2024—indicating progress amid caution.

👉 Stay ahead with real-time insights on crypto regulations and market trends.

The evolving regulatory landscape—from tax reforms to city-led Bitcoin initiatives—reflects a maturing digital asset ecosystem. As governments refine their approaches and companies scale responsibly, clarity and collaboration will be key to sustainable growth. Whether you're an investor, developer, or policymaker, staying informed is essential in navigating this dynamic space.