IRS orders Kraken to provide user data


July 4, 2023


Olumide Adesina

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Kraken was ordered to provide personal information about its users to IRS in a court filing. The filing states that Kraken must provide the IRS with identifying information about users who have traded at least $20,000 worth of crypto assets in a single year. This applies to users who were active between January 1, 2016, and December 31, 2020. The court ruled that Kraken must share certain information such as usernames, dates of birth, tax IDs, addresses, and contact information.

In particular, it ruled that the tax authorities' requirements for KYC/AML data and information about users' employment, assets, and wealth sources were too broad. As such, Kraken does not have to provide this data to his IRS yet.

Kraken must not only provide useful information but also provide certain on-chain information such as transaction hashes and blockchain addresses. The amount of blockchain data Kraken needs to provide accounts for a “chain split” or hard fork that could affect a user's inventory, but is not fully documented in Kraken's records. yeah.

Finally, Kraken has been asked to provide certain transaction records, particularly transaction records determined not to be involved in excessive government solicitation.

The IRS has been hunting for Kraken data for years

The IRS has been trying to obtain Kraken user credentials since at least May 2021, when it was allowed to serve subpoenas on exchanges. The current lawsuit began in February 2023 after officers attempted to serve a 2021 subpoena.

Tax authorities have historically accessed customer data from other crypto platforms such as Coinbase, Circle, and SFOX. Recent polls show that the majority of cryptocurrency investors do not pay taxes on their investments or profits, even if there are rules.