One of the world’s prominent crypto exchanges Kraken has been ordered by a U.S. Federal court to hand over user data to the Internal Revenue Service (IRS). The order is part of the IRS’s efforts to ensure compliance with tax regulations and identify individuals who may have failed to report their crypto gains accurately.
Meanwhile, this development comes shortly after Kraken reached a settlement with the Securities and Exchange Commission (SEC) over charges of securities law violations linked to its staking service.
The Court Order and its Objectives
The court order, issued by the United States District Court for the Northern District of California, mandates Kraken to provide the IRS with customer information for users who conducted transactions exceeding $20,000 in crypto between 2016 and 2020.
Consequently, Kraken is now obligated to disclose user names, transaction records, birthdates, taxpayer identification numbers, addresses, phone numbers, email addresses, and other documents. This court order underscores the ongoing efforts of regulatory authorities to ensure tax compliance within the crypto industry.
In addition to disclosing user information, Kraken has been directed by a U.S. federal court to release blockchain addresses and transaction hashes to the IRS. According to the court, these data elements play a crucial role in enabling the IRS to track and analyze crypto transactions.
It is worth noting that the IRS has already obtained user data from crypto companies like Coinbase, Circle, and SFOX.
Judge Denies IRS Requests for Certain Information
During the proceedings, Judge Joseph Spero carefully evaluated the requests made by the IRS to obtain user data from Kraken. In his assessment, the judge emphasized the importance of determining whether the government’s summons were appropriately focused and necessary to achieve its intended purpose.
Specifically, Judge Spero denied the IRS’s requests for employment information and source of wealth from Kraken. Judge Spero’s ruling reflects the need to strike a balance between regulatory investigations and the privacy rights of individuals and businesses involved.
It highlights the court’s responsibility to ensure that government requests are appropriately targeted and do not exceed what is necessary to achieve their intended objectives.
AD
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
