I just saw a quite interesting phenomenon: the U.S. tax authorities are entering a new phase of regulation on digital assets. Since last year, Form 1099-DA has become a "nightmare" for all trading platforms and Web3 participants—but to be honest, the logic behind this is actually worth studying.

First, let's talk about the background. In 2021, the United States passed the Infrastructure Investment and Jobs Act, officially including digital assets into the scope of tax reporting. After three years of preparation, the IRS finally released detailed rules in July 2024. Starting this year, this system has been fully operational, and trading platforms are required to report users' transaction data to the IRS. This is not just about a single form; it’s more like a "ledger revolution" for the entire crypto ecosystem.

The most core change lies in granularity. The IRS is no longer satisfied with general transaction data but demands precise details about each transaction's nature. They introduced DTIF codes to standardize the identification of different tokens, and even set up separate reporting boxes for the original minting income of NFTs and secondary market transactions. Simply put, every transaction step must be clearly broken down.

Interestingly, while the IRS enforces strict regulation, they also show flexibility. They set differentiated exemption thresholds: transactions processed by payment processors under $600 do not need to be reported; qualified stablecoins exceeding $10,000 annually require reporting; NFT transactions over $600 are reportable. The core logic of this design is to filter out massive amounts of retail consumption data, avoiding overwhelming the tax system with small transactions like coffee money. For stablecoins and NFTs using simplified reporting methods, brokers can report in aggregate rather than per transaction.

What does this mean? For users, data governance becomes essential. Casual trading and chaotic bookkeeping are no longer viable. Whether using self-custody tools like Revolution Wallet or trading on platforms, every operation will be recorded. If you want to stay compliant, you need to develop clear accounting habits from now on.

For platform and wallet developers, this is a bigger challenge. They need to improve data collection and reporting systems to ensure accurate tracking of cost basis (although reporting is voluntary this year, it will be mandatory next year). Some platforms are already upgrading their Revolution Wallets and account systems, adding automated tax data export features to help users more easily meet reporting requirements.

Another detail worth noting: the IRS explicitly states that the 1099-DA forms in 2025 will not participate in the federal and state joint filing plan. This means platforms may need to submit data separately to different state tax authorities. This will further increase compliance costs, but in the long run, it’s also preparing for the U.S. to join the OECD’s global crypto asset reporting framework (CARF).

From a global perspective, this is not just a unilateral move by the U.S. The OECD had already released the CARF framework in 2022, with over 40 countries committed to implementation. If the U.S. truly integrates into this system, it means the U.S. tax authorities can access account information of U.S. taxpayers on overseas exchanges. This will have profound implications for the global crypto ecosystem.

For Web3 practitioners and high-net-worth investors, it’s no longer a question of "whether to comply" but "how to comply more efficiently." Upgrading from chaotic bookkeeping to a clear tax system requires good tools—whether self-custody solutions like Revolution Wallet or data management features provided by platforms. Whoever completes this upgrade first will be able to maintain competitiveness amid the wave of transparent regulation.

In short, the launch of 1099-DA marks a turning point. Crypto assets are moving from wild growth to institutionalization, which is both a challenge and an opportunity for the entire ecosystem.