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Tax agencies will double down on crypto before Bitcoin hits M

Opinion by: Robin Singh, CEO of Koinly

In the race between regulation and Bitcoin (BTC) all-time highs, there is no doubt tax agencies will double down on their crypto-tracking systems well before Bitcoin hits $1 million.

Crypto investors shouldn’t become complacent or assume they can skate by until the million-dollar price tag. In addition to their laser focus on the future, they are becoming skilled at scrutinizing the past. Many jurisdictions have the power to backtrack on previous years, and if tax authorities realize how much they’ve missed, they won’t just let it slide…

This could spell trouble for misinformed Bitcoiners who have already begun spending their profits.

Tax agencies will catch up through automated data-sharing

Governments are still in this weird gray area where crypto tax rules can change anytime. Take the US Internal Revenue Service (IRS), for example. In a shock move, as of 2025, the IRS now mandates that investors use the wallet-by-wallet cost tracking method, no longer allowing the universal wallet method. The latter is far more labor-intensive than the former but hands the IRS more data it craves.

Though automated data sharing with tax agencies might not be as extensive as stock market data, it’s only a matter of time before crypto data from centralized exchanges catches up. Several crypto exchanges, including Coinbase and Binance.US, issue Forms 1099-MISC to the IRS for users with more than $600 in rewards in a financial year.

An end to the honesty system

Then there’s the global village challenge, with each tax agency worldwide taking its own approach. For instance, the Australian Tax Office (ATO) automates stock cost and sale reporting through pre-filled data for taxpayers. Crypto data isn’t, however, included in the pre-fill. 

Instead, any activity on a centralized exchange triggers an alert on the taxpayer’s tax return, indicating that the ATO is aware of the crypto activity. This leaves it up to the taxpayer to be honest about whether they’ve made capital gains or losses during the financial year.

Whether you’ve made any sales or simply bought crypto, consistent alerts over several years without reporting from the taxpayer will likely increase the risk of an audit.

Worldwide, the honesty system is on its deathbed. Once tax authorities have advanced their crypto monitoring systems, they can retroactively review previous years if they choose to. The ATO already has a reasonably intensive data-matching program with centralized exchanges in the jurisdiction.

If you value your sanity, a multi-year audit of your crypto portfolio is the last thing you want to deal with. Every tax authority is catching up, and accountants want to protect clients from getting caught out as compliance measures become more sophisticated.

Tax authorities to strengthen cooperation in the coming years

Over the coming years, we should expect to see an increase in global tax data sharing between jurisdictions, something we’re already starting to see. In March 2024, Australia’s and Indonesia’s governments reached an agreement to exchange tax information, with one of the key focuses being the use of crypto.

A few months earlier, in November 2023, 47 national governments, including the United Kingdom, Brazil, Germany and Japan, committed to the Crypto-Asset Reporting Framework (CARF) and planned to activate exchange agreements for information sharing by 2027.

Recent: Indian crypto holders face 70% tax penalty on undisclosed gains

Don’t operate under the assumption that decentralized finance and non-fungible tokens are flying under the radar, either. Tax authorities are fully aware of the gains made on decentralized exchanges. Agencies like the IRS have already introduced guidance to collect user data from non-custodial brokers, though this has been delayed until 2027. 

While tracking might be more challenging, and some investors believe their assets are untraceable until they are moved to centralized exchanges, tax authorities are already catching on. It’s not a “crypto industry knows best” situation. Tax authorities are bringing in more experts from the crypto space to help them understand how people might try to bypass the system. 

Opinion by: Robin Singh, CEO of Koinly.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Another tantrum from the Labour backbenches is inevitable

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

In common with many parents across the country, here’s a conversation that I have with my young daughter on a semi-regular basis (bear with me, this will take on some political relevance eventually).

Me: “So it’s 15 minutes until your bedtime, you can either have a little bit of TV or do a jigsaw, not both.”

Daughter: “Ummmm, I want to watch TV.”

Me: “That’s fine, but it’s bed after that, you can’t do a jigsaw as well.”

Fast-forward 15 minutes.

Me: “Right, TV off now please, bedtime.”

(Pause)

Daughter: “I want to do a jigsaw.”

Now replace me with the government, the TV and jigsaw options with axing welfare cuts and scrapping the two-child cap, and my daughter with rebellious backbenchers.

Politics latest: Former Labour leader calls for wealth tax on assets above £10m

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Rachel Reeves’s fiscal dilemma

That is the tension currently present between Downing Street and Labour MPs. And my initial ultimatum is the messaging being pumped out from the government this weekend.

In essence: you’ve had your welfare U-turn, so there’s no money left for the two-child cap to go as well.

As an aside – and before my inbox fills with angry emails lambasting me for using such a crude metaphor for policies that fundamentally alter the lives of some of the most vulnerable in society – yes, I hear you, and that’s part of my point.

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Welfare U-turn ‘has come at cost’

For many in Labour, this approach feels like the lives of their constituents are being used in a childish game of horse-trading.

So what can be done?

Well, the government could change the rules.

Altering the fiscal rules is – and will likely remain – an extremely unlikely solution. But as it happens, one of Labour’s proverbial grandparents has just popped round with a different suggestion.

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Welfare: ‘Didn’t get process right’ – PM

A wealth tax, Lord Neil Kinnock says, is the necessary outcome of the economic restrictions the party has placed on itself.

Ever the Labour storyteller, Lord Kinnock believes this would allow the government to craft a more compelling narrative about whose side this administration is on.

That could be valuable, given one of the big gripes from many backbench critics is that they still don’t really understand what this prime minister stands for – and by extension, what all these “difficult decisions” are in aid of.

The downside is whether it will actually raise much money.

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Is Corbyn an existential risk to Labour?

The super-rich may have lots of assets to take a slice from, but they also have expensive lawyers ready to find novel ways to keep their client’s cash away from the prying eyes of the state.

Or, of course, they could just leave – as many are doing already.

In the short term, the future is a bit easier to predict.

If Downing Street is indeed now saying there is no money to scrap the two-child cap (after heavy briefing in the opposite direction just weeks ago), an almighty tantrum from the backbenches is inevitable.

And as every parent knows, the more you give in, the harder it becomes to hold the line.

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UK restores diplomatic ties with Syria

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UK restores diplomatic ties with Syria

The UK has re-established diplomatic ties with Syria, David Lammy has said, as he made the first visit to the country by a British minister for 14 years.

The foreign secretary visited Damascus and met with interim president Ahmed al Sharaa, also the leader of the rebel group Hayat Tahrir al-Sham (HTS), and foreign minister Asaad al Shaibani.

It marks the latest diplomatic move since Bashar al Assad’s regime was toppled by rebel groups led by HTS in December.

In a statement, Mr Lammy said a “stable Syria is in the UK’s interests” and added: “I’ve seen first-hand the remarkable progress Syrians have made in rebuilding their lives and their country.

“After over a decade of conflict, there is renewed hope for the Syrian people.

“The UK is re-establishing diplomatic relations because it is in our interests to support the new government to deliver their commitment to build a stable, more secure and prosperous future for all Syrians.”

Foreign Secretary David Lammy shakes hands with Syrian interim president Ahmed al-Sharaa in Damascus. Pic: X / @DavidLammy
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Foreign Secretary David Lammy with Syria’s interim president Ahmed al Sharaa in Damascus. Pic: X / @DavidLammy

The Foreign, Commonwealth and Development Office has also announced a £94.5m support package for urgent humanitarian aid and to support the country’s long-term recovery, after a number of British sanctions against the country were lifted in April.

While HTS is still classified as a proscribed terror group, Sir Keir Starmer said last year that it could be removed from the list.

The Syrian president’s office also said on Saturday that the president and Mr Lammy discussed co-operation, as well as the latest developments in the Middle East.

Read more:
Wildfires break out in Greece, Turkey and Syria
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Since Assad fled Syria in December, a transitional government headed by Mr al Sharaa was announced in March and a number of western countries have restored ties.

In May, US President Donald Trump said the United States would lift long-standing sanctions on Syria and normalise relations during a speech at the US-Saudi investment conference.

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From May: Trump says US will end sanctions for Syria

He said he wanted to give the country “a chance at peace” and added: “There is a new government that will hopefully succeed.

“I say good luck, Syria. Show us something special.”

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Secret Service seizes $400M in crypto, cold wallet among world’s largest

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Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service quietly amasses one of the world’s largest crypto cold wallets with $400 million seized, exposing scams through blockchain sleuthing and VPN missteps.

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