Biden Budget Put Crypto Reporting Into the U.S. Revenue Plan

The U.S. Treasury on May 28, 2021 placed crypto exchanges, custodians and hosted-wallet providers inside two proposed information-reporting expansions released with President Joe Biden’s fiscal 2022 budget. The proposals did not change the law on May 28. They did, however, put digital-asset intermediaries into the administration’s formal revenue program and frame offshore crypto activity as a tax-enforcement problem requiring cross-border data exchange.

That made the Greenbook more consequential than a general warning about compliance. It described who could have to report, what information the government wanted and when the proposed rules were intended to begin.

Two reporting tracks

The first track was a broad financial-account reporting regime. Treasury proposed annual information returns covering gross inflows and outflows, with separate reporting for physical cash, foreign-account transactions and transfers between accounts owned by the same person. Accounts below either $600 in gross flows or $600 in fair market value would have been outside the proposed threshold. Treasury said similar requirements would apply to crypto-asset exchanges and custodians.

The same section proposed reporting when a taxpayer bought crypto through one broker and transferred it to another. It also said businesses receiving crypto with a fair market value above $10,000 would have to report those transactions. Treasury proposed making this package effective for tax years beginning after December 31, 2022.

The second track addressed broker reporting and international exchange of tax information. Treasury proposed requiring brokers—including U.S. crypto exchanges and hosted-wallet providers—to report information about certain passive entities and their substantial foreign owners when those entities held crypto in an account with the broker. Combined with existing law, the proposal contemplated reporting gross proceeds and other information required by the Treasury secretary for customer crypto sales.

That broker proposal was designed to let the United States provide information to partner jurisdictions and receive information about U.S. taxpayers using offshore crypto services. Its proposed effective date was for returns required to be filed after December 31, 2022.

Why the institutional shift mattered

On May 28, 2021, neither track was an enacted rule. The Greenbook itself said the administration’s proposals were not intended to create inferences about current law. Congress would have to legislate, and Treasury and the Internal Revenue Service would still need to define operational details through implementation.

Even at the proposal stage, the institutional direction was clear. The administration was treating custodial digital-asset businesses as reporting intermediaries comparable, for tax-compliance purposes, to firms already furnishing account or broker information. For exchanges and custodians, the potential burden extended beyond recording a sale: the proposals reached account flows, transfers, customer identity and, in defined cases, foreign beneficial ownership.

The cross-border element was equally important. Treasury argued that U.S. taxpayers could use offshore exchanges and wallet providers without leaving the country, while effective automatic exchange depended on reciprocity. The proposal therefore connected domestic reporting by U.S. firms to the government’s ability to obtain information from foreign jurisdictions.

What the May 28 record did not establish

The documents established an administration proposal, not passage, an effective regulation or proof of tax evasion by any named exchange or customer. The $600 figure described the Greenbook’s proposed account threshold; it was not a new event-day tax on $600 of crypto activity. Likewise, the above-$10,000 business-reporting provision concerned information reporting, not a declaration that smaller transactions were tax-free.

No defensible price reaction is assigned here. Crypto trades continuously across venues, and the May 28 documents do not isolate their effect from the other forces moving the market. The verifiable development is narrower: the Biden administration formally embedded crypto-specific domestic and international reporting measures in its fiscal 2022 revenue proposals, giving the industry a concrete policy text to evaluate.