Kraken ordered to turn over customer information to the IRS

Quick Take

  • Kraken was ordered on Friday to fork over information about its users to the Internal Revenue Service.
  • The judge said the government had a “legitimate purpose for seeking the materials.” 

A U.S. judge ordered cryptocurrency exchange Kraken to fork over certain personal information about its users as part of an Internal Revenue Service investigation. 

The IRS wants Kraken to identify accounts that had at least $20,000 in annual crypto trading in the period from 2016 to 2020, according to the order. Kraken has previously refused to comply with the IRS’ summons citing concerns, in part, that it would be a heavy burden and was overly broad. 

“The Government has a legitimate purpose for seeking the materials described in the summon. As discussed above, the summons was issued in connection with an investigation by the IRS to determine the identity and correct federal income tax liability of U.S. persons who conducted transactions in cryptocurrency during the period 2016-2020,” Judge Joseph C. Spero said in the court document. 

Kraken will have to disclose information such as names, date of birth, physical address, phone numbers and tax identification numbers.

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Other information such as net work and internet protocol addresses would not have to be sent to the IRS, according to a Kraken spokesperson.

"We fought the IRS because they sought intrusive and unnecessary information about U.S. clients, including IP addresses, employment information, sources of wealth, net worth, and banking details," the spokesperson said. "We appreciate that the Court rejected all these demands, recognizing that the IRS requests were 'much broader than what is necessary.'"

(Updates to add comment from Kraken)


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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

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