The U.S. Internal Revenue Service (IRS) released a statement on July 31, introducing new regulations concerning the taxation of the cryptocurrency industry. According to these regulations, individuals participating in the process of validating cryptocurrency networks through staking will be obligated to pay taxes. This means that the profits earned from this process will be treated as gross income and must be reported and taxed in their annual tax returns.
These regulations apply to both those directly involved in securing Proof-of-Stake networks and those staking their cryptocurrencies through cryptocurrency exchanges. This new ruling comes as a surprise to the cryptocurrency industry, as the previous IRS guidelines did not specifically address such activities related to cryptocurrencies. According to Ryan Selkis, the founder of Messari, the IRS views cryptocurrency staking as akin to receiving dividends from stocks, which is why they have introduced these new tax rules.