Federal Judge Orders Cryptocurrency Exchange Kraken To disclose customer information to the IRS.
of Internal Revenue Service According to Friday (June 30), Kraken customers were asking for information to help determine whether they were underreporting their income when filing their tax returns. court judgmentThis comes amid a broader government crackdown on the cryptocurrency sector.
PYMNTS has reached out to Kraken for comment, but has not yet received a response.
U.S. Magistrate Judge Joseph Spero has ruled that Kraken must provide the IRS with information about customers who made transactions over $20,000 between 2016 and 2020. That information includes your name (and pseudonyms), date of birth, tax ID number, address, phone number, email address, and many other documents.
The judge denied IRS requests for information from Kraken’s Know Your Customer (KYC) due diligence questionnaire, including employment, net worth, sources of wealth, anti-money laundering investigation records, and said they ” It exceeds standards,” he said. As reasonably necessary to fulfill the purpose of these requests. ”
The verdict comes months after the Kraken Termination of cryptocurrency staking service Available for US customers as part of a settlement with the Securities and Exchange Commission (SEC). The settlement, which includes $30 million in penalties and other costs, comes after the SEC accused Kraken of failing to register the offer and sale of the program.
SEC Chairman Gary Gensler said, “Whether through staking-as-a-service, lending, or other means, cryptocurrency intermediaries are prohibited by securities law from offering investment contracts in exchange for investors’ tokens. We need to provide the appropriate disclosures and safeguards required.” he said at the time.
The court’s ruling comes as Gensler’s agency has stepped up its focus on the cryptocurrency sector and filed lawsuits against two of the industry’s biggest players last month.
SEC last month filed 13 charges Alleges various securities law violations against Binance, the world’s largest cryptocurrency exchange, and also against its founder, Zhao Changpeng, alleging that the company was “involved in a wide-ranging web of deception.” bottom.
Binance said in a statement, “The Commission has decided to regulate with the blunt force of enforcement and litigation, rather than the thoughtful and nuanced approach required for this dynamic and complex technology … SEC’s actions will impact financial innovation and the world of finance.” It undermines America’s role as a strategic hub.” leadership. “
The following day, the regulator separately sued the United States-Based listed cryptocurrency exchange coin baseBinance’s peers claimed the platform allowed their users to trade unregistered securities.
Coinbase claimed last week that the SEC failed to provide adequate clarity on its regulation. motion to dismiss Agency matter.
