More than half of cryptocurrency investors do not understand the basic concept of tax liability when it comes to their holdings of digital assets, according to a survey by US-listed cryptocurrency exchange Coinbase (COIN) and CoinTracker, a crypto tax and portfolio tracking platform.
The 2026 Crypto Tax Readiness Report found that only 49% correctly understand that crypto is taxable whenever it is sold, while nearly a quarter mistakenly believe that simple transfers trigger tax events.
Despite the majority of users having good intentions when it comes to crypto tax compliance, the multi-platform reality of crypto ownership exacerbates the so-called cost basis problem, in that the original purchase price of an asset is deducted to report capital gains.
The survey found that users had an average of 2.5 platforms/wallets, with 83% using self-deposit wallets and only 35% reporting that they had adjusted their cost base in the past. The survey, conducted in late 2025, surveyed 3,000 US crypto users.
Confusion about the cost basis in the new 1099-DA forms is getting worse thanks to a degree of over-reporting built into the new regime, Coinbase says. This is because everyday activities like stablecoin payments and Ethereum gas fees trigger taxable events while generating little meaningful tax revenue.
Coinbase said it expects to issue over four million 1099-DA forms to customers with less than $600 in proceeds — adding to the fact that over 60 percent of its customers have incomplete cost basis data due to the way digital assets move across wallets and platforms.
“Today that means every stablecoin payment, every little DeFi [decentralized finance] transaction, each gas fee is technically a taxable event,” Coinbase said. “The compliance burden this places on ordinary Americans isn’t just inconvenient — it’s a direct threat to the adoption and innovation the GENIUS Act was designed to unlock.”
Despite the wrinkles, the move to standardized reporting of crypto-taxes will help adoption in the long term, said Matt Price, director of research at blockchain research firm Elliptic. Price, a former IRS special agent focused on criminal investigations, sees this as a shift toward targeted enforcement rather than the broad, manual investigations of the past.
Price is also a former head of research at Binance, and understands the complexities of doing crypto taxes, having been partially paid in crypto by Binance and having to account for a volatile asset in the form of a payment.
“How do you even report that?” Price said in an interview. “I didn’t even have a 1099 to report it, so I essentially had to do all my own accounting to file accurate taxes to account for that information.”
As such, the arrival of 1099-DA forms means welcome standardization that simply brings crypto in line with what other financial products have had for years and mirrors the approach to 1099-B for brokerages.
“There are certainly nuances, and it’s a fair point that the basis is harder to calculate given the high frequency of trading,” Price said. “But there are also some parallels to that in traditional investments; I don’t know how many retail traders do algo trading on Schwab, for example, but it’s also a very similar type of trading. If they can figure it out, I think the industry can probably figure it out.”
