Do cryptocurrency exchanges have to report to the IRS?

In the realm of cryptocurrency and finance, one question that often arises is whether or not cryptocurrency exchanges are obligated to report their activities to the Internal Revenue Service (IRS). The IRS, as the primary tax collection agency in the United States, has a vested interest in ensuring that all taxable transactions are properly accounted for. Cryptocurrency exchanges, being intermediaries in the buying and selling of digital assets, are often seen as potential hubs of taxable activity. Therefore, it's crucial to inquire whether these exchanges must adhere to IRS reporting requirements, and if so, what those requirements entail. Understanding the tax implications of cryptocurrency transactions is not only essential for individual investors but also crucial for the exchanges themselves to maintain compliance and avoid potential legal issues.