IRS Targets Kraken Crypto Exchange for Customer Identities

IRS Takes Action Against Kraken Exchange

The Internal Revenue Service (IRS) is taking action against the giant crypto exchange, Kraken, for failing to provide requested information regarding US customers who conducted crypto transactions worth $20,000 or more between 2016 and 2020. The IRS has petitioned the US District Court for the Northern District of California for an order that would enforce a summons served on Payward Ventures, one of the companies that are a part of Kraken. Furthermore, the IRS wants to obtain records on customer identities and transactions from Kraken.

John Doe Summons Granted in May 2021

In May 2021, a branch of the California District Court granted the IRS permission to issue a John Doe summons on Kraken in order to discover the identities of United States residents and citizens who had conducted high-value crypto transactions in the previous four years. A John Doe summons permits the tax body to “obtain names, requested information and documents concerning all taxpayers in a certain group.” Additionally, per the American Department of Justice (DoJ), the IRS was at this time given power to force Kraken to reveal information about US taxpayer customers who conducted USD 20,000 or more worth of crypto transactions between 2016-2020.

Kraken Responds

When asked about these claims made by this February 2023 filing, a Kraken spokesperson told Cryptonews.com that,”We have not been served with the referenced petition…” indicating that they were unaware of this most recent filing.

Summary

The IRS has petitioned in court for an order enforcing its summons on Payward Ventures and all its subsidiaries relating to customer identities and transaction records from Kraken exchange’s US customers who have conducted crypto transactions worth $20 000 or more within 2016-2020 timeframe. Furthermore, such action grants them access to names and other requested documents related to any taxpayer within this certain group. In response, Kraken states it was unaware of this most recent filing as it hasn’t been served with it yet.

Conclusion

The Internal Revenue Service is taking legal measures against giant crypto exchange, Kraken due its failure to provide requested information regarding its US customers’ activities within specified timeframe as well as ignoring their investigation summonses issued back in May 2021. It remains unclear what will be further outcome but as things stand now it appears that many American citizens may be affected by this action taken by IRS if dragged into court proceedings involving summoning orders against Kraken Exchange.