The U.S. District Court for the Northern District of California has mandated that the cryptocurrency exchange Kraken disclose user account and transaction data to the Internal Revenue Service (IRS). This is part of an ongoing tax investigation. The court order, issued on June 30, requires Kraken to share details of users who have made transactions exceeding $20,000 within a single year. The information to be shared includes names (real or pseudonyms), birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and various other documents.
This order follows a court petition submitted by the IRS in February, shortly after Kraken settled with the U.S. Security Exchange Commission (SEC) over allegations of securities law violations related to its staking service. The IRS alleges that it had issued a summons to Kraken in 2021, which the exchange did not comply with. The IRS now seeks to investigate the tax obligations of users who conducted cryptocurrency transactions between 2016 and 2020.
In addition to this, Kraken will also have to release blockchain addresses and transaction hashes, which are already included in the transaction data available for sharing. The exchange may also be asked to provide raw data to the IRS. However, Judge Joseph Spero, who presided over the case, seems to have dismissed the IRS’ attempt to obtain employment information and source of wealth from Kraken. The judge outright denied several of the IRS’ requests.
The court's decision to side with the government is part of a broader U.S. crackdown on cryptocurrency. In June, the SEC filed separate lawsuits accusing Coinbase of running an illegal exchange and alleging Binance.US mishandled customer funds, misled investors and regulators, and broke securities rules.
Earlier there was news that Kraken is launching the NFT market.
