- The IRS targets unhosted crypto wallets in its draft 1099-DA reporting form, raising concerns among industry experts about privacy, security, and the feasibility of enforcement. Critics argue the IRS’ approach fails to consider the operational realities of unhosted wallets, potentially implicating end users in stringent KYC procedures. Despite these challenges, the form includes provisions for brokers on reporting transaction IDs and wallet addresses, with exceptions for transactions not conducted on-chain. The draft, part of ongoing efforts to regulate crypto under the 2021 Infrastructure Act, is still open for comments, indicating rules are not yet finalized.. Source
