Kraken Ordered To Release Customer Data To IRS In Crypto Tax Probe

Kraken Ordered To Release Customer Data To IRS In Crypto Tax Probe

A US judge issued a court order to digital currency exchange Kraken in which it has been told to release customer data to the IRS.

Submitted on Friday, the court filing said that the Internal Revenue Service (IRS) requires details of accounts with an annual trading activity of at least $20,000 or higher from 2016 to 2020.


A court petition had been submitted by the IRS last February in the Northern District of California in which it had highlighted its intention of investigating the data and financial records of the San Francisco-based exchange.

The IRS asserted that it was doing so to identify crypto users who may not have fulfilled their tax obligations.

The petition had specifically asked for access to the records, books, papers, and other data of the Kraken crypto exchange.

The petition had said that the IRS wanted to identify the US persons who had conducted transactions in the years 2016 to 2020 and determine their correct federal income tax liability.

The IRS further said that it had sent a summons to Payward Ventures Inc., the parent company of the Kraken exchange, back in 2021.

The tax agency had asked for customer information for people who had used the crypto exchange between 2016 and 2020.

The ruling

According to the government, there is a valid reason for the IRS to ask for the materials that have been mentioned in the subpoena.

Joseph C. Spero, the judge presiding over the matter, stated that the IRS has the authority to ask for details that might be potentially relevant to an ongoing investigation.

Therefore, Spero granted the request of the IRS and issued an order to Kraken to share comprehensive customer data.

The data includes user IDs, full names or pseudonyms, taxpayer identification numbers, dates of birth, telephone numbers, physical addresses, and also email addresses.

This requirement is applicable to all users of the exchange who have conducted crypto transactions that have a combined value of $20,000 or above in the years mentioned, regardless of the type of transactions.

Previous ruling

In November 2017, a federal court order had been issued to Coinbase in San Francisco because of which the company had had to share customer data with the IRS.

According to the ruling, the crypto exchange had to provide identifying details of its users to the tax agency who had conducted transactions of $20,000 or above during the years 2013 to 2015.

The IRS had shifted its focus on finding crypto users who were evading taxes and Coinbase had become embroiled in the process because of the information it held.

The legal tussle that had happened between Coinbase and the Internal Revenue Service (IRS) in 2017 had been mentioned several times in the court case involving Kraken.

The crypto exchange would now be required to comply with the court order and provide the tax agency with the customer information it has asked for in order to identify crypto tax evaders.