US-based exchange Kraken says it will share the data of 42,000 users with the US Internal Revenue Service (IRS) in compliance with a court order. The information will be sent to the IRS in early November.
On its support page, Kraken specifies that the subpoena to produce “a broad range of records and data” about its US customers and pass them to the IRS came from a court order from the Northern District of California in May 2021. The company opposed this. IRS demands and fought the subpoena in court, convincing it to “substantially reduce” the number of affected customers and the amount of customer data.
The court ordered Kraken to submit profile and transaction data of customers who exceeded $20,000 in transactions during any year between 2016 and 2020. This also includes those who made no transactions but deposits and withdrawals.
Kraken will share data such as name, date of birth, tax identification, address, contact information and transaction history of these customers. There will be about 42,000 accounts whose information will be sent to the IRS.
The US Court of Appeals for the First Circuit is reviewing another case in which the IRS subpoenaed user data from a crypto exchange. In 2018, Coinbase told the 13,000 affected customers that it would provide the IRS with their taxpayer ID, name, date of birth, address, and historical transaction records from 2013-2015.
One such user, James Harper, appealed against the IRS to prevent the US government from having unlimited access to a user’s transaction history. In October 2023, cryptocurrency advocacy group DeFi Education Fund (DEF) filed an amicus brief supporting Harper’s appeal.