Crypto exchange Kraken was ordered by a federal court to turn over account and transaction information to the IRS, which said it needed that information to see if any of the exchange's users had failed to file their taxes.
according to the request issued On Friday June 30, Kraken must provide details of users who made transactions greater than $20,000 within a calendar year, including their names (real or pseudonyms), dates of birth, tax identification numbers, addresses, phone numbers, email addresses and various other documents.
In February, the IRS filed a court petition in the Northern District of California shortly after Kraken settled with the United States Securities and Exchange Commission (SEC) over claims of securities law violations related to its stakeout service. The IRS claimed it had issued a subpoena to Kraken in 2021, which the exchange failed to comply with, and now seeks to investigate the potential tax liabilities of users who made crypto transactions between 2016 and 2020.
In addition, Kraken must release block chain addresses and transaction hashes, which are already included in the transaction data available for sharing. The exchange may also be asked to provide raw data to the IRS.
Judge Joseph Spero, who presided over the case, appears to have dismissed the IRS's attempt to obtain Kraken employment and source of wealth information. The judge flatly denied several of the IRS's requests.
In the judge's evaluation of certain IRS applications, he stated that the Court must determine whether the government subpoena is properly focused, meaning that it must not go beyond what is necessary to achieve its intended purpose.
Related: Nifty News: Kraken NFT Comes Out of Beta, Coinbase's 'Stand with Crypto' Gains Support, and More
According to the Court's findings, the information requested in the first three requests, which are intended to identify Kraken account holders who fall within Doe's definition, is too broad and exceeds what is necessary for most users to of Doe establish their identities.
Friday's ruling siding with the government comes amid a deepening US crackdown on cryptocurrency. This month's Securities and Exchange Commission filed separate lawsuits accusing Coinbase of running an illegal exchange and alleging that Binance.US mishandled client funds, misled investors and regulators, and violated securities rules.
Magazine: Best and Worst Countries for Cryptocurrency Taxes, Plus Cryptocurrency Tax Tips
Post navigation
