The Digital Chamber, a leading blockchain trade association, has raised privacy concerns over the IRS's proposed tax reporting draft. The association recommends that the final form 1099-DA request only necessary information required for reporting of digital asset transactions by taxpayers.

The proposed draft has been criticized for being overly complex and burdensome. The crypto community has called for simple regulations to spur market growth and protect the privacy of taxpayers. The Digital Chamber has highlighted concerns for the proposed guidelines and recommended only necessary information be requested.

The proposed law requires sensitive data including wallet addresses and transaction IDs. This has raised privacy concerns with several regulatory requirements for users to disclose certain information. The growth of privacy coins to hide transactions and senders has been spurred by these concerns.

The crypto sector has also stressed the importance of positive crypto laws to increase investment within the space. Blockchain firm, Consensys, has written to the IRS asking to delay implementation of the rules citing the burden it will have on firms.

The law requires exchanges to report certain transactions and this will impact firms without those obligations previously. The crypto community has raised privacy concerns with several regulatory requirements for users to disclose certain information. This has led to the growth of privacy coins to hide transactions and senders.