March 27, 2024
Kraken to Share Data of 42K Users with IRS
Latest Cryptocurrency News

Kraken to Share Data of 42K Users with IRS

Kraken, a U.S.-based cryptocurrency exchange, has announced its intention to comply with a court order to share the data of approximately 42,000 users with the Internal Revenue Service (IRS). The court order, issued in May 2021 by the U.S. District Court for the Northern District of California, compelled Kraken to provide a wide range of records and data on its U.S. clients to the IRS. While Kraken initially objected to the IRS’s demands, it managed to significantly reduce the number of affected clients and the amount of data to be disclosed.

Under the court’s directive, Kraken is required to furnish profile and transaction data for clients who conducted transactions exceeding $20,000 in any single year between 2016 and 2020. This includes individuals who made deposits and withdrawals but no actual transactions. The data to be shared encompasses names, dates of birth, tax identification numbers, addresses, contact information, and transaction history. Approximately 42,000 accounts will have their information sent to the IRS.

In a related case, the U.S. Court of Appeals for the First Circuit is currently reviewing a similar situation involving the IRS’s request for user data from the cryptocurrency exchange Coinbase. In 2018, Coinbase informed 13,000 affected customers that it would provide the IRS with their taxpayer IDs, names, birthdates, addresses, and historical transaction records from 2013 to 2015. One user, James Harper, has appealed against the IRS’s request, seeking to prevent unrestricted access to users’ transaction histories. In October 2023, the DeFi Education Fund, a cryptocurrency advocacy group, filed an amicus brief in support of Harper’s appeal.

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