Crypto salaries are falling across the board despite Bitcoin’s record-breaking run this year, as companies lean on cost discipline and normalize pay after years of aggressive expansion. The downturn spans nearly every role and region, with both cash pay and token incentives shrinking from last year’s levels, according to the 2024/2025 Crypto Compensation Report from venture capital firm Dragonfly. “Overall, we’d call crypto compensation in 2024 and early 2025 a down market, and practices still felt relative ...

Core Insights - The IRS's new digital asset reporting rules are turning crypto payroll from a simple HR perk into a compliance challenge for employers [1][2] - Companies that previously utilized crypto compensation to attract talent are now facing complex reporting requirements that many payroll departments are unprepared for [2][3] Group 1: Regulatory Changes - The introduction of Form 1099-DA and Revenue Procedure 2024-28 has created a challenging reporting environment for payroll departments [2] - Employers must now transition from treating crypto payroll as a straightforward W-2 transaction to a more complex basis documentation process [3][4] Group 2: Compliance Challenges - Payroll teams are required to adapt their processes to include basis reporting alongside traditional wage reporting to avoid confusion and potential penalties [4][5] - The new framework emphasizes gross proceeds reporting without cost basis, leading to potential double taxation issues for employees if proper documentation is not maintained [4][5] Group 3: Operational Implications - Revenue Procedure 2024-28 necessitates wallet-level basis tracking, complicating the payroll process and requiring detailed ledger management [5] - Companies must ensure they provide wallet-level cost basis support to employees to prevent conflicts between W-2s and 1099-DAs [5]