Kraken to share user data with IRS next month following June court order
Quick Take
- Crypto exchange Kraken will share user data with the IRS next month following a June court order.
- The data concerns Kraken U.S. users with transactions exceeding $20,000 from 2016 to 2020.
Crypto exchange Kraken is set to share select user information with the Internal Revenue Service next month after being mandated by a court order received in June.
"Kraken expects to share this information covered by the court's order in early November 2023," reads an email the crypto exchange sent to affected U.S. users on Wednesday that was seen by The Block. Kraken confirmed the email and reiterated some of the comments made in it.
The IRS-Kraken battle began in May 2021 when a U.S. federal court authorized the tax agency to serve a John Doe summons on the crypto exchange and its subsidiaries in a bid to catch tax dodgers. The IRS at the time said that Kraken had failed to comply with the summons. Then in February of this year, the tax agency filed a court document seeking permission to enforce the summons, and in June, a federal court ordered Kraken to turn over user information to the IRS.
According to the June order, Kraken must provide profile information and transaction histories for clients who conducted transactions exceeding $20,000 in any single year between 2016 and 2020. This information includes names, birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and transaction histories for those five years.
The IRS had sought more extensive information, including users' IP addresses, employment details, sources of wealth, net worth, and banking information. However, Kraken said in Thursday’s email that it had successfully convinced the court to "substantially reduce" the number of affected clients and the amount of client data it must produce.
The reduced number appears to be 42,017, per June's court order, whereas the IRS had initially sought information on 59,331 Kraken users.
Kraken is not the only crypto firm sharing user information with the IRS. In 2018, its rival Coinbase shared details of around 13,000 users with the federal tax agency. In 2021, the IRS also issued similar summons to crypto exchange Poloniex and stablecoin issuer Circle.
Updated with Kraken's comment.
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