IRS wants to receive information about users who made crypto transactions exceeding $20,000 between 2016 and 2020.
Kraken, a United States–based cryptocurrency exchange established in 2011, has received the US District Court for the Northern District of California order to disclose user account and transaction information to the Internal Revenue Service (IRS).
The IRS justifies this requirement as an essential step to ascertain whether any of Kraken's users have understated their taxes.
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According to the court order publicized on June 30th, Kraken is asked to disclose detailed information about users who executed transactions exceeding $20,000 within a calendar year.
The required information includes but is not limited to real names or pseudonyms, taxpayer identification numbers, birthdates, phone numbers, addresses, and email addresses, along with a variety of other documents.
The court order also demands that Kraken release blockchain addresses and transaction hashes, which are already part of the transaction data that can be shared.
The IRS initiated a court petition in the Northern District of California in February, just after Kraken arrived at a settlement with the US Security Exchange Commission (SEC).
At that time, the IRS declared that in 2021, it had issued a summons to Kraken, which the crypto exchange did not comply with. Therefore, the agency is now seeking to scrutinize the tax responsibilities of users who transacted in cryptocurrency between 2016 and 2020.
However, the presiding judge, Joseph Spero, appeared to dismiss several IRS requests, including the agency's attempt to gain access to employment details.
Judge Spero emphasized that the court must ensure the government's summons are appropriately targeted, meaning it shouldn't exceed what is necessary to achieve its purpose.
This ruling in favor of the government comes amidst an intensifying US crackdown on cryptocurrency. In June, the SEC filed separate lawsuits accusing Coinbase of operating an unlawful exchange and alleging that Binance.US mishandled customer funds, deceived investors and regulators, and violated securities rules.
