Autor Cointelegraph by Christina Comben

After Bitget got hacked on Sept. 24, $387.5 million of stolen funds quickly began moving across chains, with some headed to decentralized cross chain swaps platform THORChain.Chief executive Gracy Chen publicly appealed to the platform to refuse service to attacker-linked addresses. “The industry is watching,” she said.Yet THORChain refused. And that refusal has kicked off a furious debate between those who believe protocols have a moral obligation to block stolen funds, and those hold the cypherpunk ideals of decentralized, permissionless technology sacrosanct. Having previously watched on as the Bybit hackers funneled $1.2 billion through the protocol, it’s pretty clear which side of the argument THORChain is on. Developer Boone Wheeler tells Magazine:“A truly permissionless protocol can do nothing when it encounters known stolen funds — it is blind to their provenance. If THORChain were able to block specific stolen funds, it would not be permissionless.”Where does permissionlessness end? Critics argue that THORChain wasn’t quite so idealistic when validators voted to halt the chain in May after an automated system triggered when an attacker exploited a vulnerability and drained over $10 million from one of its vaults. Bitget CEO argues THORChain should refuse services. Source: Gracy ChenNEAR Intents, which is a cross-chain transaction competitor of THORChain, took the opposite approach and intervened to block hack-linked funds. Its automated security layer SHIELD identified more than $50 million in attempted flows linked to the Bitget incident and stopped $503,000 during execution. It said $166,000 passed through. Related: THORChain under fire over Bitget, ETH evolves beyond blockchain: Hodler’s DigestNEAR also waived its share of Bitget’s recovery bounty. General manager Alex Shevchenko tells Magazine, “NEAR Protocol is permissionless: anyone can build on it, transact on it, and become a validator…“No one needs permission to hold or transfer assets or deploy contracts on NEAR Protocol. However, that does not mean every application built on NEAR must process every request.”NEAR Intents has since come under heavy fire for intervening, with critics arguing it demonstrates it is not permissionless or decentralized. This may expose it to claims it should exercise that control more broadly. However, because SHIELD is an automated system, crypto lawyer Yuriy Brisov believes it could still fall within the protections afforded to decentralized protocols. “There is no compliance team, people who sit there and control the operation manually. This is a smart solution, and that’s what we recommend to all the DeFi companies.”Source: Omid MalekanPermissionless does not necessarily mean neutral Biget’s Chen tells Magazine that while she understands different protocols have “different architectures, governance models and technical capabilities,” there is an important distinction between permissionless infrastructure and “facilitating the movement of known stolen funds.”She points to NEAR Intents’ actions and says, “We appreciate that response and will follow the appropriate legal and recovery process for those assets.”Bitget wants to understand “what is technically and governance-wise possible when stolen assets are identified,” Chen says, and whether the industry can find workable approaches together:“Permissionless infrastructure does not necessarily mean there can be no mechanisms for detecting and responding to known illicit flows.” Complicating THORChain’s argument, it has shown it can intervene in an emergency if it chooses to. THORChain’s post-mortem of the May exploit said the protocol automatically halts activity when its solvency checks detect an insolvency event, and node operators can then use broader emergency controls to pause trading, signing and other network activity. Related: SlowMist traces Bitget hack activity to Aug. 31 zero-day exploitWheeler says there is “firm consensus” among THORChain’s nodes around the ideal of being permissionless, and that “halts are only used when there is an active issue or problem with the protocol.” Moreover, he says there is “no functionality to screen individual addresses or transactions.” This is a design choice, as the system was “intentionally designed to be truly permissionless.”THORChain halted its chain in May over a security incident. Source: THORChainNEAR Intents provides a contrasting modelWhile THORChain is located at the shadowy super-coder end of the spectrum, the NEAR team occupies the middle ground. NEAR has a new ETF from Bitwise and has a different philosophy and approach.Shevchenko says NEAR Intents was designed to enable open participation but has its own financial integrity measures, and SHIELD is built to “automatically apply targeted controls to supported flows.”In this incident, he says SHIELD used public onchain data and signals from an internal anti-money laundering (AML) database and third-party intelligence providers, such as those listed in the NEAR Intents risk and compliance docs. “SHIELD not only protects NEAR Intents but the whole cross-chain ecosystem it serves,” Shevchenko says: “Every major hack drains capital and activity from the onchain economy, so screening for stolen funds and restricting money laundering helps protect the integrity of the wider blockchain economy.”In fact, the AI-based SHIELD identified the suspicious behavior behind Thursday’s $3.8 million Omni deposit/withdrawal interaction exploit, and halted activity. Chen says when stolen funds can be reliably identified, ecosystem participants “should cooperate where technically and legally possible.” That could mean tracing and information sharing, declining transactions, freezing assets where the infrastructure allows it, or “supporting recovery through the appropriate legal and law enforcement processes.”The cost of drawing the line Joël Valenzuela, a libertarian, cypherpunk and head of business and development for Dash, argues that permissionless means exactly that.“Permissionless protocols, quite frankly, should not draw the line anywhere when stolen funds are identified, because being able to do so at all makes them permissioned.”He says that, as “painful” as it is to watch stolen funds freely moved, the ability to step in and prevent this “opens up Pandora’s Box” and “lets all manner of censorship of innocents eventually happen.” Instead, centralized exchanges should harden security protocols, he says: “High-level exchanges custodying billions of dollars need to take their security much more seriously. Ultimately, DEXs are the way forward.”Max Shannon, senior research associate at Bitwise Europe, says that protocols still in their formative years, like THORChain and NEAR, still have to earn trust and that refusing to launder hack proceeds is a “sound stance.” He believes THORChain’s actions will likely result in more money laundering flows shifting from NEAR Intents to THORChain.Valenzuela argues we must hold the line on permissionlessness. Source: Joël Valenzuela“Credible neutrality at all costs,” Shannon says, is a “cypherpunk ideal” that a small faction of crypto users and builders still champion.“They rarely ask why it is valuable, when it is valuable, or what it costs,” he says. “This is the core difference between NEAR Intents and THORChain.”Magazine: Altseason is coming — and traders are more discerning this timeCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

Anyone who’s ever sent a bank transfer overseas is familiar with the painful process of waiting for things like working hours, correspondent banks and settlement times. In many cases, it would be faster, cheaper and just more efficient to strap the physical cash to a homing pigeon, or slap it in an envelope and send it via DHL.Stablecoins can move money across borders around the clock, without waiting for the legacy system to fire up its steam engines.They can settle transactions 24/7, cut out layers of intermediaries and give people access to digital dollars without even needing a traditional bank account. So do we even need banks any more? And what are the ramifications of stablecoins offering a faster, cheaper and easier way to move money?The two clocksAnthony Vassallo, director of crypto at Silicon Valley Bank, which failed in March 2023 and now operates as a division of First Citizens Bank, tells Magazine competition from stablecoins will show up across two time frames:“Two clocks matter. One is slow: currency substitution, deposit erosion, and weakening policy transmission building over months or years. One is fast: a depeg, issuer shock, or banking event that can move capital at software speed within hours.”The European Central Bank raised concerns about the impacts, arguing that large amounts of stablecoin reserves held in bank deposits could trigger cascading withdrawals if there were a surge in redemptions.The bank points to a “liquidity mismatch” between digital money and the banking system that supports it, with reserve assets subject to traditional settlement timelines, while stablecoins settle around the clock.Related: MiCA cracks down on USDT in Europe… but no one else caresWe already saw that dynamic in action in March 2023 when USD Coin lost its dollar peg after Circle’s disclosure that $3.3 billion of its reserves were held at the failed Silicon Valley Bank. The incident turned a banking failure into a stablecoin crisis almost overnight, with authorities having to step in to guarantee deposits. Large stablecoin reserves could trigger a bank run. Source: ECBBank runs are pretty extreme cases; the slower clock Vassallo describes has more of a drip-drip effect. It can happen without a crisis, and may be harder to see as it unfolds.Dollarization at a slower pace In July 2026, the Bank for International Settlements looked at stablecoin flows and conventional foreign currency deposits across 130 economies. It found that both tend to grow at times of currency pressure and during banking or sovereign crises, with stablecoin flows appearing less affected by capital controls. So, when people are trying to move out of a deteriorating local currency, stablecoins can provide a dollar-based alternative that’s harder for local governments to contain. A September report from Sphere Labs and SVB describes Argentina, Nigeria and Turkey as markets where stablecoin demand has been closely connected to demand for dollar exposure.In Argentina, for example, it says 94% of crypto bought with pesos was in stablecoins, while in Turkey, around $38 billion worth of lira was swapped for stablecoins over a year.Arnold Lee, chief executive of Sphere Labs, says stablecoin adoption is fundamentally a dollar story driven by demand for dollars from people who face barriers to accessing the traditional banking system. He tells Magazine: “Most of these economies are going to keep moving toward dollars […] What I spend my time on is the manner of it, because a country that manages the shift and one that gets overtaken by it end up in very different places.”When the clock speeds upA separate BIS study published in March found that a rise in demand for dollar stablecoins can spill into traditional currency markets. Markets where stablecoin demand is connected to demand for dollar exposure. Source: Sphere/SVBThe study looked at four major USD-pegged stablecoins across 27 fiat currencies between 2021 and 2025, and found that increased stablecoin demand could put downward pressure on local currencies and make dollars more expensive to obtain through FX swaps, with the effect stronger when financial intermediaries were already under strain. Lee says, “When citizens in high-inflation economies move from local currency into digital dollars, monetary transmission weakens, deposit bases erode, and pressure builds faster than central banks can respond.” Related: Stablecoins not credible for payments at scale, BIS chief saysThe Sphere report describes how, during a January 2025 dispute between the US and Colombia, Colombians plowed funds into digital dollars. Banks and currency exchanges were closed for the weekend, but the casa de blockchain is always open.That’s where the ECB’s warning shot reverberates the loudest.Under current Markets in Crypto Assets (MiCA) rules, stablecoin issuers must hold at least 30% of reserves in bank deposits, and up to 60% for significant asset-referenced tokens (ARTs).Lessons for the rise of stablecoins. Source: BISThe European System of Central Banks proposed moving away from those fixed percentages earlier this month, toward requirements based on how quickly reserve assets can be made available.That would avoid a doomsday scenario where heavy redemptions bleed commercial lenders dry overnight; something Tether chief executive Paolo Ardoino warned about in 2024, when he called MiCA “very dangerous when it comes to stablecoins.”So the same system can create pressure in both directions: money can leave a bank and move into stablecoins when users want digital dollars, then flow back through banks when those stablecoins are redeemed. The technology doesn’t determine which direction the flow takes, but it can determine how quickly it can happen.So what actually gets displaced?However, stablecoins are not taking over the world just yet. Often they are simply an intermediate currency that moves faster, but still ends up as dollars in the bank.Pankaj Bengani, former executive at Block and co-founder of stablecoin payments company MELD, tells Cointelegraph that close to half of the company’s B2B stablecoin offramp volume is in North America. He says the businesses using it include importers, exporters, technology firms, e-commerce marketplaces, payment companies and fintechs.“The vast majority of corporates in our data convert back to fiat immediately after the transaction settles. They are not taking a crypto position. They are using MELD as a settlement rail instead of SWIFT,” Bengani says.He says the biggest flows are cross-border commercial payments, particularly where businesses earn or hold dollars but suppliers and employees need local currency.Supplier payments make up close to a third of business use, while invoice settlement accounts for roughly a quarter.That paints a different picture from people turning to digital dollars to protect their savings from inflation or yanking lump sums out of the fiat system in times of stress.And it raises another interesting question: if the money isn’t staying in crypto, what part of the traditional system is actually being displaced? Bengani says:“Stablecoins won’t replace SWIFT overnight. The realistic change is a thinner correspondent layer, with a common settlement rail replacing intermediary steps that exist only because banks historically needed each other to cross borders.”In a world where money moves at the speed of thought, that doesn’t mean banks disappear.Bengani says reserves still sit in bank deposits and Treasuries, businesses still need fiat currencies, and banks remain important for “custody, compliance, liquidity, and local settlement.”But what changes is the plumbing in between — stablecoins may not be removing banks from the financial system as much as changing where the friction sits.Magazine: Exchanges reporting crypto gains to IRS becomes tax nightmareCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

Altseason may not be officially here, but traders are starting their rotations — and the numbers are getting harder to ignore.Over the past 30 days, memecoin launchpad PONS soared more than 350% in price, while in DeFi, Uniswap’s UNI gained more than 110%, Arbitrum’s ARB jumped over 150% and AI-focused NEAR also shot up around 180%.Privacy token Zcash hit a record high above $1,600 last week, while Bitcoin Layer-2 token LIT and memecoin launchpad token PUMP are also among the biggest gainers over the period, according to CoinMarketCap.Spanning very different sectors, those gains don’t point to one obvious trade, but they do suggest many traders are looking at coins with a good business case behind them this time around.Looking at the massive gains in tokens such as ARB, UNI, Jupiter’s JUP and Ondo’s ONDO, Bankless podcast host David Hoffman said Friday that what they had in common is, “They make money, they all print revenue,” suggesting that this rally could be driven by utility rather than speculation. Among the top 20 biggest gainers last week, there were only two memecoins. In the past week, only Pudgy Penguins made the list. But it’s not all about fundamentals according to 1inch co-founder Sergej Kunz, who notes that over the last 30 days, memecoins have shown the strongest growth among buyers. But he says DeFi protocols, privacy tokens, AI projects and tokenized assets are also attracting attention.Related: The 100x obsession: Fundamentals grow in importance as crypto matures“The pattern so far is breadth before depth,” he tells Magazine, with more wallets buying a broader range of tokens, but generally in smaller amounts.“The caution in the data fits the broader pattern of selective participation,” he says. Users are participating “selectively rather than going all-in.”So what will make this altseason different?Is the market finally getting more discerning and allocating into assets with actual utility as Hoffman suggests, or will it once again end up driven by memecoins featuring dogs in hats and sexual innuendos?It’s too early to say, with CoinMarketCap’s official Index yet to break into Altcoin Season. It’s currently sitting at 64 out of 100, up from 48 last week but still a little way below the 75 threshold that marks an official new season.A small number of coins account for most of the market. Trading firm Talos data shows the top 10 altcoins currently account for roughly 80% of total altcoin market capitalization, up from around 70% at the end of 2024. Hoffman says this rally is being driven by revenue-generating protocols. Source: Bankless.Samar Sen, head of international markets at Talos, says the data is “pointing to a market where capital is clustering around a smaller number of assets rather than rotating broadly into the long tail.”He says Talos’ September flow data also shows a “notably strong buying tilt,” with buying dominating on almost every day. That contrasts with late 2024, he says, when buyers and sellers were more evenly matched, and the post-election rally produced broader outperformance across tokens including DOGE, ADA and HBAR.What people are actually buyingAccording to Sen, the strongest performance is around specific themes, like revenue-generating protocols, onchain perpetuals and DeFi projects, including HYPE, LIT, UNI and MORPHO. Privacy-related assets such as ZEC, NEAR and XMR are also performing strongly, alongside AI-adjacent tokens including VVV and TAO.Related: Crypto’s next altseason may have fewer winners: WintermuteTalos is also seeing a flurry of activity around memecoin launchpads, including PUMP and PONS, and the Robinhood ecosystem and USELESS memecoin are performing well.PONS is the biggest gainer in the last 30 days. Source: CoinMarketCapLike Kunz, Sen says the market is becoming “much more selective.” “Investors are concentrating around specific narratives and ecosystems rather than treating altcoins as a single broad trade.”Tokenized gold and tokenized stocks are also seeing more buyers, and AI tokens are up as well, “albeit from a small base.”Overall however, it may be less of a wholesale shift from speculation to utility and more of a jumble of competing narratives.And with the explosion of unconventional trading pairs on Robinhood earlier this month, we caught a glimpse of how the categories are beginning to overlap. Tokenized stocks are suddenly being traded against memecoins via market pairings like BONER/HIMS and SPACEHOOD/SPCX.One such pairing generated more than $425 million in 24-hour trading volume in early September.The case for a more fundamental altseasonMichael Egorov, founder of Curve Finance and Yield Basis, says he’s seeing more attention around actual use cases and institutional demand than in previous cycles.“All in all, I’d say there’s now more interest in protocols that actually do something useful, can connect crypto with real financial activity, and prove it in action,” he says.Stablecoins are one example, he says, particularly their use in onchain foreign exchange and fintech applications. He believes the “biggest driver” will be the growing integration of crypto infrastructure with the real economy.If that demand keeps growing, it could give this altseason a new source of buying, as crypto infrastructure becomes more useful outside of crypto trading itself — but that’s a big if.Who is actually driving the rally?Talos data shows dealer participation in altcoin trading has fallen from around 65% at the end of 2024 to about 32% in September, even while flows maintained a strong buying trend.“That is a significant difference from the last altcoin rally,” Sen says, “and suggests liquidity providers and market makers have so far played a smaller role in the current move.” He says that, at the same time, access has become easier, and exposure that once required traders to interact directly with decentralized venues like Raydium or Orca is now available through mainstream platforms. That “lowers barriers to entry and broadens retail participation,” he says.Professional traders also have more tools for following the money this cycle, from wallet tracking to copy trading that can provide signals about where capital is moving across wallets, protocols and chains.According to Sen, that creates a combination of broader retail access alongside more sophisticated ways for professional traders to identify where activity is building. Magazine: Exchanges reporting crypto gains to IRS becomes tax nightmareCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

Altseason may not be officially here, but traders are starting their rotations — and the numbers are getting harder to ignore.Over the past 30 days, memecoin launchpad PONS soared more than 350% in price, while in DeFi, Uniswap’s UNI gained more than 110%, Arbitrum’s ARB jumped over 150% and AI-focused NEAR also shot up around 180%.Privacy token Zcash hit a record high above $1,600 last week, while Bitcoin Layer-2 token LIT and memecoin launchpad token PUMP are also among the biggest gainers over the period, according to CoinMarketCap.Spanning very different sectors, those gains don’t point to one obvious trade, but they do suggest many traders are looking at coins with a good business case behind them this time around.Looking at the massive gains in tokens such as ARB, UNI, Jupiter’s JUP and Ondo’s ONDO, Bankless podcast host David Hoffman said Friday that what they had in common is, “They make money, they all print revenue,” suggesting that this rally could be driven by utility rather than speculation. Among the top 20 biggest gainers last week, there were only two memecoins. In the past week, only Pudgy Penguins made the list. But it’s not all about fundamentals according to 1inch co-founder Sergej Kunz, who notes that over the last 30 days, memecoins have shown the strongest growth among buyers. But he says DeFi protocols, privacy tokens, AI projects and tokenized assets are also attracting attention.Related: The 100x obsession: Fundamentals grow in importance as crypto matures“The pattern so far is breadth before depth,” he tells Magazine, with more wallets buying a broader range of tokens, but generally in smaller amounts.“The caution in the data fits the broader pattern of selective participation,” he says. Users are participating “selectively rather than going all-in.”So what will make this altseason different?Is the market finally getting more discerning and allocating into assets with actual utility as Hoffman suggests, or will it once again end up driven by memecoins featuring dogs in hats and sexual innuendos?It’s too early to say, with CoinMarketCap’s official Index yet to break into Altcoin Season. It’s currently sitting at 64 out of 100, up from 48 last week but still a little way below the 75 threshold that marks an official new season.A small number of coins account for most of the market. Trading firm Talos data shows the top 10 altcoins currently account for roughly 80% of total altcoin market capitalization, up from around 70% at the end of 2024. Hoffman says this rally is being driven by revenue-generating protocols. Source: Bankless.Samar Sen, head of international markets at Talos, says the data is “pointing to a market where capital is clustering around a smaller number of assets rather than rotating broadly into the long tail.”He says Talos’ September flow data also shows a “notably strong buying tilt,” with buying dominating on almost every day. That contrasts with late 2024, he says, when buyers and sellers were more evenly matched, and the post-election rally produced broader outperformance across tokens including DOGE, ADA and HBAR.What people are actually buyingAccording to Sen, the strongest performance is around specific themes, like revenue-generating protocols, onchain perpetuals and DeFi projects, including HYPE, LIT, UNI and MORPHO. Privacy-related assets such as ZEC, NEAR and XMR are also performing strongly, alongside AI-adjacent tokens including VVV and TAO.Related: Crypto’s next altseason may have fewer winners: WintermuteTalos is also seeing a flurry of activity around memecoin launchpads, including PUMP and PONS, and the Robinhood ecosystem and USELESS memecoin are performing well.PONS is the biggest gainer in the last 30 days. Source: CoinMarketCapLike Kunz, Sen says the market is becoming “much more selective.” “Investors are concentrating around specific narratives and ecosystems rather than treating altcoins as a single broad trade.”Tokenized gold and tokenized stocks are also seeing more buyers, and AI tokens are up as well, “albeit from a small base.”Overall however, it may be less of a wholesale shift from speculation to utility and more of a jumble of competing narratives.And with the explosion of unconventional trading pairs on Robinhood earlier this month, we caught a glimpse of how the categories are beginning to overlap. Tokenized stocks are suddenly being traded against memecoins via market pairings like BONER/HIMS and SPACEHOOD/SPCX.One such pairing generated more than $425 million in 24-hour trading volume in early September.The case for a more fundamental altseasonMichael Egorov, founder of Curve Finance and Yield Basis, says he’s seeing more attention around actual use cases and institutional demand than in previous cycles.“All in all, I’d say there’s now more interest in protocols that actually do something useful, can connect crypto with real financial activity, and prove it in action,” he says.Stablecoins are one example, he says, particularly their use in onchain foreign exchange and fintech applications. He believes the “biggest driver” will be the growing integration of crypto infrastructure with the real economy.If that demand keeps growing, it could give this altseason a new source of buying, as crypto infrastructure becomes more useful outside of crypto trading itself — but that’s a big if.Who is actually driving the rally?Talos data shows dealer participation in altcoin trading has fallen from around 65% at the end of 2024 to about 32% in September, even while flows maintained a strong buying trend.“That is a significant difference from the last altcoin rally,” Sen says, “and suggests liquidity providers and market makers have so far played a smaller role in the current move.” He says that, at the same time, access has become easier, and exposure that once required traders to interact directly with decentralized venues like Raydium or Orca is now available through mainstream platforms. That “lowers barriers to entry and broadens retail participation,” he says.Professional traders also have more tools for following the money this cycle, from wallet tracking to copy trading that can provide signals about where capital is moving across wallets, protocols and chains.According to Sen, that creates a combination of broader retail access alongside more sophisticated ways for professional traders to identify where activity is building. Magazine: Exchanges reporting crypto gains to IRS becomes tax nightmareCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.

It’s that time of year again in the United States. The days start to draw in, the leaves start to fall, and the tax man comes knocking for your 2025 return.This year, thanks to the Inland Revenue Service’s new rules, the agency now knows more about Americans’ crypto trades than ever before, with brokers required to report gross proceeds from certain digital asset sales. But unfortunately for some taxpayers, getting a form from an exchange hasn’t made filing their returns any easier.A survey of 1,000 US crypto investors conducted in August by Awaken Tax found that 21% of respondents who had filed, or planned to file a tax extension, said they were still waiting for information they needed from an exchange or crypto platform.A further one in five said their 1099-DA, the tax form brokers use to report certain digital asset sales, was either incomplete or they weren’t sure whether it accurately reflected their transactions.The numbers come as taxpayers attempt to navigate the first filing season under the new reporting rules, with those who filed for an extension having until Oct. 15 to submit.For 2025, brokers were generally required to report the proceeds (how much an asset was sold for), but not the cost basis (how much the taxpayer originally paid for it).That requires taxpayers to calculate their gains and losses themselves, which isn’t much fun even for infrequent traders, but is a time consuming quagmire for active ones.Chris Herbst, managing director of CountDeFi tax reporting, tells Magazine, “For an active trader, that number can be many times their real gain, because each sale is counted at full value with no cost against it.”And that gets to the heart of the problem: the IRS can see the sale, but the taxpayer still has to work out what they actually made. What the new 1099-DA actually tells the IRSFor a simple transaction, the calculation is straightforward. If you bought Bitcoin for $9,000 and sold it for $10,000, the gain is $1,000.Understanding your Form 1099-DA. Source: IRS.govBut a 2025 1099-DA could show the $10,000 in proceeds without reporting the $9,000 basis needed to calculate that gain. So if you don’t know how much you spent on a particular crypto asset, working out the math can become a Byzantine exercise.Related: US House tax committee advances crypto tax overhaul in 38–5 voteAnd it means taxpayers need their own records to fill in the missing pieces, including information that may stretch across multiple exchanges, wallets, trades and years. “The gap is real,” says Herbst, “but it is a record-keeping gap on the taxpayer side as much as a reporting gap on the exchange side.” When the forms don’t matchTax professionals say they are already seeing problems when taxpayers try to reconcile the new forms with their transaction histories.Sharon Yip, founder of Crypto Tax Advisors, says her firm has found discrepancies between the 1099-DAs received by clients and the crypto tax reports it prepared for them. Some forms did not include all the trades clients made during 2025, Yip says, while exchanges also used different formats for their customer statements. Some exchanges reported cost basis on certain trades but not others, she says, even though reporting basis was not mandatory for 2025:“It’s very confusing for recipients to understand how to reconcile their 1099-DAs when compared to the crypto tax report they should use to file their tax return.”She also gives an example involving stablecoins, saying one of her firm’s clients had more than $300,000 in stablecoin trades on an exchange in 2025, but the exchange’s 1099-DA showed less than $100,000 in total stablecoin proceeds.And the issues can start before taxpayers even get to calculating their gains. Andrew Duca, founder of Awaken Tax, says the firm saw customers receiving 1099-DAs relatively late in the filing season. “Because this regulation is new, a lot of exchanges are still trying to figure it out,” he says, pointing to exchanges like Kraken that “didn’t send any forms to users until two weeks before the tax deadline of April 15.” Duca says Kraken only sent 1099-DA forms two weeks before the deadline. Source: Andrew DucaDuca also cites the example of a Kraken 1099-DA from around the same period that shows no reported transaction information. Kraken did not respond to Magazine’s request for comment.The information taxpayers still needBut here’s the thing: the new forms were never intended to replace taxpayers’ own records. The IRS says taxpayers must report digital asset income and gains or losses whether they receive a 1099-DA or not. Related: Chainalysis estimates $457B in taxable crypto activity, says CARF misses mostWhere the basis is not reported, taxpayers should use their own records to complete their tax return, but that gets complicated quickly when crypto assets move frequently between platforms.So, you might buy Bitcoin on one exchange, transfer it to a private wallet, move it to another exchange and sell it there — and the second exchange doesn’t have the information showing what you originally paid.About Form 1099-DA. Source: IRS.gov“The full transaction history from the day the account opened” is what taxpayers need from exchanges, Herbst says. That includes trades, fees, deposits, withdrawals and transaction identifiers, such as the wallets involved.He says basis follows the asset as it moves between platforms, which means one missing piece of transaction history can affect a gain calculated years later on another exchange.More data for the IRS, more work for taxpayers?Andrew Gordon, executive director of Digital Asset Tax Action, says taxpayers are “constantly” struggling to reconcile 1099-DAs with their own records during the 2025 filing season.He says most crypto tax software lacks tools to import and reconcile 1099-DA information, and the few that do still require manual entry because brokers did not provide the 2025 forms in a machine-readable format.For active traders, Gordon says, manually entering the information can mean hundreds of individual entries. He argues that brokers should provide a machine-readable file alongside every 1099-DA so the information can flow directly into tax software. He also says exchanges should maintain complete transaction histories, including acquisition dates, amounts paid, fees and transfers.Gordon’s concern is that the IRS’s increased visibility doesn’t translate into a complete tax calculation for the taxpayer.“The 1099-DAs only reported proceeds in 2025, and proceeds reporting gives the IRS visibility it did not previously have;” however:“Visibility without basis produces the zero-basis problem.”Taxpayers shouldn’t blindly copy the numbers from a 1099-DA onto their tax return. Duca advises them to compare it against their complete transaction history rather than automatically accepting the form’s figures:“The IRS expects your return to reflect your actual gains and losses, not necessarily what’s printed on a form that the exchange may have worked out incorrectly.”Will 2026 make things easier?While crypto taxpayers are still grappling with the 2025 filing season, more changes are coming down the line. From 2026, brokers must generally report cost basis for covered digital assets, which will give taxpayers more information to calculate their gains and losses. However, assets transferred to a broker from another exchange or wallet can still fall outside those requirements.So, the IRS may know more about your crypto trades, but when it comes to working out what you owe, you still need to keep the receipts.Magazine: Winners and losers of the SEC’s new tokenized stocks rulesCointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. 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