• 29 May, 2024
News

Kraken to Comply with IRS Order, Sharing User Data in Tax Battle: Report

In a significant turn of events, a leading crypto exchange Kraken, is set to comply with a court order, sharing vital user information with the Internal Revenue Service (IRS) next month. This revelation comes after a legal battle in May 2021 when a United States federal court granted the tax agency the authority to issue a John Doe summons to Kraken and its subsidiaries as part of a concerted effort to uncover tax evaders.

At the heart of the matter was the IRS’s contention that Kraken had failed to adhere to the summons issued in May 2021. The situation escalated further in February of this year when the IRS formally petitioned the court to enforce the summons. Ultimately, the tides turned in June when a federal court ordered Kraken to relinquish user information to the IRS.

According to a recent report,  Kraken must now furnish the IRS with a trove of data. This data includes profile information and transaction histories of clients who engaged in transactions surpassing $20,000 in any single year from 2016 to 2020. The spectrum of information encompasses personal details like names, birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and a comprehensive transaction history for the specified five-year period.

However, it is noteworthy that Kraken successfully negotiated with the court to significantly reduce the number of affected clients and the quantum of user data to be produced to safeguard user privacy. As a result, the reduced number of users whose data will be shared with the IRS now stands at 42,017, as stipulated in the court order from June, a marked decrease from the initial 59,331 users the IRS had sought to investigate.

It’s important to note that Kraken is not the only player in the crypto space to find itself in the crosshairs of the IRS. In 2018, rival crypto exchange Coinbase divulged information on approximately 13,000 users to the federal tax agency. In 2021, the IRS extended its scrutiny to other cryptocurrency entities, issuing similar summonses to crypto exchange Poloniex and stablecoin issuer Circle.

Kraken’s compliance with the court order signifies a significant development in the ongoing efforts of tax authorities to regulate and monitor the burgeoning cryptocurrency landscape. User privacy and legal compliance take center stage in the crypto industry’s ongoing battle with government oversight.

ETH, ADA, and XLM Witness Varied Social Sentiments Amid Market Upsurge Read Previous

ETH, ADA, and XLM Witness Varied Social Sentiments Amid Market Upsurge

German Giants Embrace NFTs: Innovative Ventures from Mercedes-Benz and Lufthansa Read Next

German Giants Embrace NFTs: Innovative Ventures from Mercedes-Benz and Lufthansa