Cryptocurrency Exchange Kraken Forced To Disclose Data of 42,000 Users To IRS

The U.S.-headquartered cryptocurrency exchange, Kraken, has publicly declared its commitment to furnish the data of 42,000 users to the U.S. Internal Revenue Service (IRS) in compliance with a court-issued mandate. We have scheduled the data transmission for early Nov.

According to its customer support materials, Kraken details that the legal requirement for the IRS to obtain an extensive array of records and information concerning their U.S. customers originates from a judgment handed down by the U.S. District Court for the Northern District of California in May 2021.

Initially opposing the IRS’s requests, the company took the matter to court, resulting in a significant reduction in the number of affected clients and the amount of client data that had to be shared.

The court mandated Kraken to provide profile and transaction data for clients who engaged in transactions exceeding $20,000 during any single year between 2016 and 2020. This requirement also encompasses individuals who made no transactions but only deposits and withdrawals.

Privacy Battle: IRS Seeks Kraken & Coinbase User Data

Kraken intends to disclose various personal details, including names, birthdates, tax identification numbers, addresses, contact information, and transaction records of impacted customers. However, Experts estimate that the IRS will receive information from approximately 42,000 accounts.

Additionally, the U.S. Court of Appeals for the First Circuit is reviewing a similar case involving the IRS’s request for user data from Coinbase. However, in 2018, Coinbase informed its 13,000 affected customers that it would furnish the IRS with their taxpayer identification numbers, names, birthdates, addresses, and historical transaction records from 2013 to 2015.

Among these users, James Harper contested the IRS’s demands to prevent the U.S. government from having unrestricted access to a user’s transaction history. In Oct 2023, the cryptocurrency advocacy organization, the DeFi Education Fund, submitted an amicus brief supporting Harper’s appeal.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.