You are solely responsible for determining and paying any taxes owed on your cryptocurrency transactions, and Coinbase may issue tax forms such as 1099s to both you and the IRS reporting your activity.
Failure to report and pay taxes on cryptocurrency gains can result in penalties from the IRS, and Coinbase's 1099 reporting means the IRS will have information about your transactions.
Coinbase's 1099-B or 1099-DA reporting obligations under IRS requirements create tax compliance exposure for account holders. Institutional and high-volume traders should maintain independent records as Coinbase's cost basis reporting may not capture all relevant information needed for accurate tax filings.
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This agreement significantly affects consumers by requiring mandatory binding arbitration and waiving the right to participate in class action lawsuits, limiting access to the traditional court system for disputes. Coinbase retains broad discretion to suspend or terminate accounts, freeze funds, and modify or discontinue services with limited notice, which can directly impact access to your digital assets. You can opt out of the arbitration clause by sending written notice to Coinbase within 30 days of first accepting the agreement, as detailed in the dispute resolution section.