Users who were active between January 1, 2016, and December 31, 2020, are included.
Most cryptocurrency investors avoid paying taxes on their holdings and profits.
According to a court filing, Kraken is required to disclose user identities to the IRS if they transact $20,000 or more in cryptocurrencies in a calendar year. Users who were active between January 1, 2016, and December 31, 2020, are included.
Kraken users’ names, ages, tax numbers, residences, phone numbers, and email addresses will be disclosed as a result of a court order.
Curbing Tax Evasion
The government’s demands for information were too broad, and the court agreed with Kraken. Particularly, it concluded that the tax agency’s requirements for Know Your Customer/Know Your Customer Anti-Money Laundering data and information on users’ jobs, net worth, and source of income were excessive. Kraken is not obligated to provide this information to the IRS at this time.
Kraken is required to provide user data as well as on-chain details like transaction hashes and blockchain addresses. Due to the impact of “chainsplitting” or hard forks on user holdings, which are not completely reflected in Kraken’s records. The exchange is required to give a substantial quantity of blockchain data.
Since at least May 2021, when it was granted permission to issue a summons on the exchange. The IRS has been trying to get Kraken’s user data. This case started in February 2023, when authorities tried to execute the 2021 summons.
The IRS has already gained access to user data from Coinbase, Circle, and SFOX, among others in the cryptocurrency industry.
According to recent polls, most cryptocurrency investors avoid paying taxes on their holdings and profits even in jurisdictions where such a need exists. The IRS’s many attacks against cryptocurrency exchanges are an effort to thwart this.