More than half of cryptocurrency investors do not understand the basic concept of taxability in terms of their digital asset holdings, according to a survey by US-listed crypto exchange Coinbase (COIN) and crypto tax and portfolio tracking platform Cointracker.
The 2026 Crypto Tax Readiness Report found that only 49% correctly understand that crypto is taxable any time it is sold, while nearly a quarter mistakenly believe that simple transfers trigger tax events.
Despite most 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, causing the asset’s original purchase price to be deducted in order to report capital gains.
The survey found that an average of 2.5 platform/wallet users use 83% self-custodial wallets, and only 35% reported that they had adjusted their cost basis in the past. The survey, conducted in late 2025, surveyed 3,000 US crypto users.
Coinbase says the confusion over cost basis in the new 1099-DA form is made worse due to a degree of overreporting built into the new system. 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 more than four million 1099-DA forms to customers earning less than $600 — taking into account the fact that more than 60 percent of its customers have incomplete cost base data due to the transfer of digital assets across wallets and platforms.
“Today, that means every stablecoin payment, every small DeFi [decentralized finance] transaction, each gas fee is technically a taxable event,” Coinbase said. “The compliance burden imposed on ordinary Americans is not only inconvenient – it is a direct threat to what the GENIUS Act was designed to do to foster adoption and unlock innovation.”
Despite the wrinkles, the move to standardized reporting of crypto taxes will help drive adoption in the long run, said Matt Price, director of investigations at blockchain analytics firm Elliptic. Price, a former IRS special agent who focused on criminal investigations, sees this as a shift toward targeted enforcement rather than the sweeping, manual investigations of the past.
The former head of investigations at Binance, Price understands the complexity of crypto taxes, paid partly in crypto by Binance and accounting for a volatile asset as payment is made.
“How do you report this?” Price said in an interview. “I didn’t even have a 1099 to report it on, so I essentially had to do all my own accounting to get accurate tax filing for that information.”
Thus, the arrival of the 1099-DA form means welcome standardization that brings crypto into line with other financial products over the years and mirrors the 1099-B approach for brokerages.
“There are certainly nuances to this and it is fair that the basis is difficult to calculate given the high frequency of trading,” Price said. “But there are some similarities to traditional investing as well; for example, I don’t know how many retail traders are running algo trades at Schwab, 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.”