A federal court has ordered cryptocurrency exchange Kraken to turn over account and trading information to the IRS. It said it needed the information to see if users of the exchange were under-reporting taxes.
The IRS filed a court complaint in the Northern District of California in February, shortly after the cryptocurrency exchange settled a complaint with the U.S. Securities and Exchange Commission that the staking service violated securities laws. Tax enforcement officers issued a subpoena against Kraken in 2021, claiming the exchange did not comply and sought to investigate the tax liability of users who traded cryptocurrencies between 2016 and 2020. .
According to Friday’s orderKraken is required to surrender information of users who have transacted more than $20,000 during the current calendar year. This includes the user’s name (and pseudonym), date of birth, tax ID number, address, phone number, email her address, and host of other documents.
Kraken will also need to provide the blockchain address and transaction hash, which are part of the transaction data that can be shared, potentially generating raw data to the IRS.
“Courts must determine whether government subpoenas are narrowly tailored, or ‘broader than necessary to achieve their purpose,'” the judge said as part of the IRS request. mentioned in the analysis. “The court held that, to the extent that the first three claims were for the purpose of establishing the identity of Kraken account holders who fall within the definition of a Doe, the information sought in those claims was not sufficient to accomplish that purpose. We have identified it as far more extensive than the information provided by the majority of Doe users.”
A Kraken spokesman did not immediately respond to a request for comment on the court’s decision.
Jesse Hamilton contributed to the report.
