US Tax Agency Asks Kraken To Submit User Information

Kraken crypto exchange. (Photo; Doc. Publish0x)

JAKARTA - The problem between Kraken and US government agencies continues. Kraken, a well-known crypto exchange, has been ordered to provide user-sensitive information to clients who have made total transactions of more than US$20,000 (equivalent to Rp300 million) for a year.

The tax agency, Internal Revenue Service (IRS), revealed that it wanted to determine whether crypto investors had reported their taxes honestly. Earlier this year, the IRS filed an initial court petition in California's Northern District, stating that it had issued a summons to the exchange in 2021 which Kraken ignored.

The tax agency also wants to check the tax obligations of users who have made transactions in the amount mentioned above between 2016 and 2020. Judge Joseph Spero has ordered Kraken to submit the information requested by the IRS.

In this case Kraken must provide information including usernames, pseudonyms (if any), taxpayer principal numbers, phone numbers, emails, physical addresses, and date of birth. However, Judge Spero appears to reject IRS requests for more detailed information regarding user wealth sources and work data.

Kraken is one of the first crypto entities under the regulatory coverage of other US government agencies, namely the Securities and Exchange Commission (SEC). A few months before the SEC pursued Binance, Coinbase, and several other digital assets, they had reached an agreement with Kraken to stop staking services and pay compensation of 30 million US dollars (approximately IDR 451 billion) in the form of compensation, prejudice, and civil penalties.

This order demonstrates the increasing attention of the US government to taxes and regulations in the crypto industry. Users and actors in the crypto market must understand their tax obligations and comply with applicable regulations to avoid possible legal consequences.