Does Trust Wallet Report to the IRS?

Trust Wallet is a cryptocurrency wallet owned by Binance that lets users buy, store, and trade digital assets across multiple blockchains.

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Unlike centralized exchanges, Trust Wallet does not hold your funds or require Know Your Customer (KYC) verification to create a wallet.

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However, some of Trust Wallet’s partner services, like fiat on-ramps and off-ramps, may require KYC. And while Trust Wallet does not report to tax agencies, transactions made through the wallet are recorded on the blockchain and can be tracked by the IRS.

No. Trust Wallet does not collect personal data or file reports with the IRS.

But this does not mean your transactions are private. In recent years, the IRS has taken the following actions to crack down on crypto tax fraud: 

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• The IRS has issued John Doe summonses to centralized exchanges like Coinbase and Kraken, requiring them to hand over customer data. 

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• The IRS works with blockchain analytics firms like Chainalysis to track cryptocurrency transactions.

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Beginning with 2025 transactions (forms sent in 2026), brokers must issue Form 1099-DA reporting gross proceeds from digital asset sales. While Trust Wallet is not a broker, transfers to and from centralized exchanges can likely be linked to your identity.

Just like transactions on other cryptocurrency platforms, transactions on Trust Wallet are subject to tax and must be reported to the IRS. 

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• Capital gains tax: Selling, swapping, or spending crypto through Trust Wallet is considered a disposal subject to capital gains tax. You’ll incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it. 

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• Income: Staking rewards, airdrops, or DeFi yields must be reported as ordinary income.

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Remember, transferring crypto to/from Trust Wallet to other wallets you own is not considered a taxable event.

While Trust Wallet itself does not require KYC, some of its integrated services do: 

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• Non-custodial by default: You do not need to verify your identity to create or use a Trust Wallet.

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• Third-party providers: If you buy or sell crypto using Trust Wallet’s fiat gateways (such as Binance Connect or MoonPay), those providers will require KYC.

There is no way to legally evade your crypto taxes. However, you can reduce your tax bill by:

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• Tax-loss harvesting: Selling crypto at a loss can offset up to $3,000 of income and an unlimited amount of capital gains. Further losses can be carried over to future tax years!

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• Using cryptocurrency tax software: Crypto tax software like CoinLedger can automatically track your Trust Wallet transactions and help you find your biggest tax-saving opportunities.