Kraken Ordered to Turn Over Its Users Data to IRS

Kraken was ordered by a judge to hand over information on any user who surpassed $20k trading volume on any given year from 2016 to 2020.

Kraken Ordered to Turn Over Its Users Data to IRS
  • "US Magistrate Judge Joseph Spero directed the company to turn over users’ names, birth dates, taxpayer identification numbers, addresses, phone numbers, email addresses, some documents and transactional ledgers."
The IRS “has a legitimate purpose for seeking the materials determine the identity and correct federal income tax liability” for users in the designated time period, the judge said.
  • "The judge agreed with the IRS’s evidence that under-reporting of income is “substantially higher where there is no third-party information reporting, as is the case with Kraken.”
  • "The judge rejected IRS demands for information in due diligence Kraken questionnaires, including users’ employment, net worth and source of wealth. He also declined to order Kraken to turn over information from anti-money laundering investigations."
  • "Kraken had called the agency’s summons an “unjustified treasure hunt,” arguing it went well beyond the boundaries set in a similar fight with Coinbase about six years ago."
  • "Spero said that while both the US and Kraken made arguments that bordered on mischaracterizing the Coinbase ruling, it is “clearly not the case,” as Kraken argued, that the earlier decision established a limit on the number of cryptocurrency accounts that can be targeted by the IRS."

Bloomberg Article