A federal court has instructed Kraken, a cryptocurrency exchange, to provide account and transaction details to the IRS. The IRS requires this information to investigate potential underreported taxes by Kraken users.
The order was issued by U.S. Magistrate Judge Joseph Spero in the Northern District of California. The order mandates that Kraken disclose user information. The information to be disclosed includes names, whether real or pseudonyms. It also includes birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and various documents.
Kraken argued against the broadness of the IRS’s summons and its violation of the Fourth Amendment’s protection. Judge Spero, however, rejected these arguments.
The court order reflects the U.S. government’s increasing crackdown on cryptocurrency. The IRS has intensified its enforcement efforts, employing subpoenas and summonses to track down tax evaders from cryptocurrency exchanges and other businesses.
Kraken’s response to the court order is uncertain. The company is reviewing the order and assessing its options. It is probable that Kraken will have to provide the requested information, which may significantly affect its users.
This court order reminds cryptocurrency users of their tax responsibilities. They should comply with the law and understand their tax obligations. If you use cryptocurrency, it is wise to seek guidance from a tax advisor for precise reporting of your transactions.
