Crypto exchange Kraken is set to share data on tens of thousands of its users with the Internal Revenue Service (IRS), in compliance with a June court order, the company has announced.
The company, specifically, will share information regarding cryptocurrency transactions above $20,000 made by Kraken customers between 2016 and 2020. U.S.-based users who made such transactions will have their account history sent to the IRS along with their name, date of birth, Tax ID, address, and contact information.
All Kraken customers affected by the announcement were contacted via email on Wednesday, according to the company. A Kraken spokesperson also confirmed the development with Decrypt. The company plans to share the user information in early November.
In June, a federal judge ordered Kraken to share such information with the IRS, after a two-year legal battle between the privacy-minded crypto company and the federal government over data sharing. Per legal filings in that case, 42,017 Kraken accounts are set to be impacted by the ruling.
While Kraken steadfastly resisted providing the IRS with the information it now must produce, the company is nonetheless framing the matter as a victory for privacy advocates—and Kraken’s legal battle with the IRS as one that ultimately prevented a greater incursion on users’ personal data.
“We objected to the IRS’s demands and fought the summons, because it sought intrusive and unnecessary information about U.S. clients, including IP addresses, employment information, sources of wealth, net worth, and banking details,” a Kraken spokesperson said in a statement shared with Decrypt. “We convinced the court to reject these demands. Kraken will always stand up for the privacy of its clients as it did here.”
The IRS is Hunting for Tax-Dodging Customers of Circle
The Internal Revenue Service (IRS) now has the authority to check whether customers of the crypto payments company Circle filed their taxes correctly. Specifically, it’s chasing after customers who traded at least $20,000 in crypto from 2016 through 2020. The summons, authorized yesterday by a Massachusetts federal court, grants IRS the power to unmask customers of the Boston-based firm who have failed to report their virtual currency transactions in tax returns. “We will enforce the law where...
The exchange is hardly the first crypto company to be forced to comply with the IRS’ demands. American crypto exchange Coinbase was ordered by a federal judge to supply the tax-collecting agency with select user data in 2018.
In 2020, another federal court granted the IRS legal authority to scour the records of crypto payments company Circle for data related to similar transactions of $20,000 or more made between 2016 and 2020. And last year, the agency gained a court order to request the same information from crypto prime brokerage SFOX.
Edited by Guillermo Jimenez
