- A US court has ordered popular cryptocurrency exchange Kraken to share user information with the Internal Revenue Service (IRS).
- The court stated that the order was given to allow the IRS to determine if any of the exchange’s users have underreported their taxes.
- Kraken will be required to provide user names, birth dates, tax numbers, addresses, phone numbers, email addresses, and on-chain data to the IRS.
US Court Orders Kraken to Share User Information with IRS
A US court has issued an order for cryptocurrency exchange Kraken to share user information with the Internal Revenue Service (IRS). The court’s decision was made in order to assist the IRS in determining whether any of the exchange’s users have failed to accurately report their taxes. This move comes after the Securities and Exchange Commission (SEC) launched an investigation into Kraken earlier this year. Following the SEC’s action, the IRS filed a court petition stating that it had sent subpoenas to the exchange in the past and requested information on the tax obligations of users who conducted transactions on the platform between January 1, 2016, and December 31, 2020.
Information Required by the IRS
According to the court’s ruling, Kraken will be required to provide the IRS with the names, birth dates, tax numbers, addresses, phone numbers, and email addresses of users who conducted transactions exceeding $20,000 during the specified period. Additionally, the exchange will also share on-chain data, including blockchain addresses, with the IRS.
Court Rejects IRS’s Request for Excessive Information
However, Judge Joseph Spero, who presided over the case, deemed the IRS’s request for information regarding users’ employment status, net worth, and sources of wealth as “excessive” and denied it. This means that Kraken will not be required to disclose these specific details to the IRS.
As the court’s decision stands, Kraken will need to comply with the order and provide the requested user information to the IRS. This development highlights the increasing scrutiny faced by cryptocurrency exchanges from regulatory bodies, as they seek to ensure compliance with tax regulations and prevent potential tax evasion.
