Laura Walter

"The IRS is requiring that everybody move from what's called a universal method of accounting to a wallet-by-wallet method... If you transfer anything into your Coinbase, you're going to have to provide the cost basis upon transfer... discourage[s] transferring a little bit." The new "wallet-by-wallet" rule destroys the convenience of moving assets between DeFi, cold storage, and exchanges. To avoid a tax reporting nightmare (reconciling transfers manually), retail users will consolidate activity onto single platforms that handle the 1099-DA automatically. Coinbase and Robinhood benefit from higher retention and reduced churn to DeFi. LONG. Regulatory friction acts as a moat for compliant, centralized US exchanges. Users may leave crypto entirely due to complexity rather than consolidating.

"The IRS is requiring that everybody move from what's called a universal method of accounting to a wallet-by-wallet method... If you transfer anything into your Coinbase, you're going to have to provide the cost basis upon transfer... discourage[s] transferring a little bit." The new "wallet-by-wallet" rule destroys the convenience of moving assets between DeFi, cold storage, and exchanges. To avoid a tax reporting nightmare (reconciling transfers manually), retail users will consolidate activity onto single platforms that handle the 1099-DA automatically. Coinbase and Robinhood benefit from higher retention and reduced churn to DeFi. LONG. Regulatory friction acts as a moat for compliant, centralized US exchanges. Users may leave crypto entirely due to complexity rather than consolidating.