Kraken Will Disclose User Information to the IRS
Date: 2023-07-02 Author: Karina Ziganova Categories: IN WORLD
A federal court ordered the Kraken cryptocurrency exchange to transfer information about users' accounts and transactions to the tax service.
The IRS filed a petition in the court for the Northern District of California in February 2023 - immediately after the crypto exchange settled charges of violating securities laws with the SEC. Representatives of the department claim that in 2021 they sent Kraken a subpoena, which the exchange did not comply.
"The Internal Revenue Service is conducting an investigation to establish the identity and correctness of the federal income tax obligations of American persons who conducted cryptocurrency transactions in 2016, 2017, 2018, 2019 and 2020," the petition says.
The government believes that the tax authority has good reasons to request the materials listed in the summons. Presiding Judge Joseph C. Spero ruled that the agency has the right to "receive information even potentially relevant to the ongoing investigation, without regard to its admissibility."
According to Friday's injunction, Kraken must disclose complete customer information, including full names, aliases or user IDs, dates of birth, taxpayer identification numbers, physical addresses, phone numbers, and email addresses. The requirement applies to all users who made transactions with cryptocurrency assets with an aggregate value equal to or greater than $20,000 between 2016 and 2020.
The tax service is hunting for clients of crypto exchanges
This isn't the first time crypto exchanges have come under pressure from the IRS. In November 2017, Coinbase complied with a federal court decision in San Francisco that ordered the company to disclose customer data to the agency. The ruling required the platform to provide the tax agency with the identification data of users who made transactions in excess of $20,000 between 2013 and 2015. The agency has set its sights on cryptocurrency tax evaders, and Coinbase has become embroiled in the pursuit of information. The legal battle with Coinbase was repeatedly mentioned in the lawsuit against Kraken.
