Anonymity-enhancing assets or unattributed transfers are barred outright, or barred for regulated firms.
What IRS broker reporting actually says
The clearest illustration of the US perimeter split. Custodial reporting arrived exactly as planned and is now in its first year of cost-basis reporting, which means identity, proceeds and acquisition history all flow to the tax authority for anyone using an intermediary. The attempt to extend the same duty to non-custodial software went the other way entirely: Congress nullified the DeFi broker rule by joint resolution in April 2025, and because it used the Congressional Review Act, no substantially similar rule can be issued without fresh legislation. That is a stronger form of repeal than a withdrawal, and it is the single most durable win for non-custodial software in US law so far.
The instruments that matter
- Form 1099-DA
- custodial brokers report customer identity and gross proceeds; the regime went live on schedule with 2025-transaction forms filed in early 2026, and basis reporting began for 2026 transactions
- The DeFi rule was repealed
- the trading front-end broker rule was nullified by joint resolution enacted 10 April 2025, and the Congressional Review Act now bars any substantially similar rule without new legislation
- Current IRS position
- the final regulations do not include reporting requirements for brokers commonly known as decentralized or non-custodial brokers
- Section 6050I still unimplemented
- the reporting of digital assets received in a trade or business, where officials have acknowledged concerns that it may reveal personal information the IRS would not otherwise have
What this means for confidential transactions
Bubble is built for exactly this shape of obligation: amounts and balances live on chain as ciphertexts, computation happens without decryption, and the only disclosure path is an on-chain access list through which an authorized party - an auditor, a supervisor, a counterparty - can request scoped decryption. That is confidentiality from the public, not from the regulator.
Related entries
- FinCENAmericas · Bank Secrecy Act · the deepest US constraint
- GENIUS ActAmericas · Stablecoins · censorability as a licensing precondition
- NYDFSAmericas · The most privacy-restrictive US regulator, state or federal
- The third-party doctrineAmericas · Why chain analysis needs no warrant
- OFAC and Van LoonAmericas · Sanctions · where the law found a limit
- US Treasury and the Working GroupAmericas · The first federal endorsement of privacy technology
Compliant by default.
See how selective disclosure satisfies a supervisor without publishing your book to the world.