• Kraken has been ordered by a federal court to hand over user account information and transaction history to the IRS.
• The order requires Kraken to provide user data such as taxpayer identification number, birth date, phone number, email address, and other documents.
• The Internal Revenue Service is seeking information on Kraken accounts that have carried out at least $20,000 worth of cryptocurrency trading in a single year between 2016 and 2020.
Kraken Ordered By Federal Court To Hand Over User Data To IRS
Cryptocurrency exchange Kraken has been ordered by a federal court to turn over user account information and transaction history to the IRS so that it can check if the exchange’s users underreported their taxes. The order comes amidst a growing crackdown on crypto and will require the exchange to provide significant user data to the authorities.
IRS Petitioned For Data From Kraken
The Internal Revenue Service had filed a court petition in the Northern District of California moments after Kraken had announced that it would settle charges brought against it by the United States Securities and Exchange Commission (SEC). The SEC had charged Kraken with offering unregistered securities through its staking as a service program. The IRS had previously issued a summons to Kraken in 2021, but the exchange failed to comply.
Court Order Requires Signficant User Data
The court ruling orders Kraken to turn over account details and user information such as taxpayer identification number, birth date, user name or pseudonym, phone number, email address, address, and several other documents. Furthermore, the exchange will also be required to turn over transaction hashes and blockchain addresses that are associated with certain transactions for further investigation into tax fraud cases.
Crackdown On Crypto Markets Intensifies
The federal court ruling comes as regulatory authorities in the United States of America increase their crackdown on the crypto markets. The Securities and Exchange Commission has already filed lawsuits against Binance and Coinbase, alleging that the former mishandled customer funds, misled investors, and broke securities laws while the latter was running an illegal exchange.
Kraken Calls Tax Agency’s Summons An “Unjustified Treasure Hunt”
On its part ,Kraken has called the tax agency’s summons an “unjustified treasure hunt”. It also argued that the summons went well beyond the boundaries set in a similar fight with Coinbase around six years ago .