In Northern California, the famous crypto exchange Kraken has been ordered by a court to provide the data of some of its users. The user data required is restricted to individuals who traded with a huge amount of funds between 2016 and 2020. The data extracted from Kraken is to be submitted to the Internal Revenue Service.
According to the court, the users need not perform such huge transactions repeatedly for their information to be provided. Any transaction done in any of the years between 2016 and 2020 that is above the stipulated amount, which is $20,000 should be reported.
The order from the court however does not imply that Kraken has been involved in fraudulent activities and is under scrutiny. The exchange has not done anything wrong. It is possible that the IRS is simply examining the citizens of the State to ensure that these groups of people have complied with tax laws and internal revenue laws within the stipulated period.
Additionally, the IRS will also use the opportunity to track the exchange and ensure that it has been compliant with the general standards for crypto exchanges such as the compulsory KYC verification for its customers and the record of all users of the platform.
IRS Targets Tax Defaulters
Commenting on the Court summon, the commissioner of the IRS revealed that they are making efforts to expose all those who are trying to evade taxes and relevant dues. General David Hubert also added that it is vital that individuals who transact in cryptocurrencies pay their taxes like any other citizen.
The Internal Revenue Service has observed that some citizens report a low or minimal income, in a bid to keep their taxes low, despite the fact that they trade and make huge gains from cryptocurrencies. Another observation is that some crypto traders make use of multiple accounts. This could also be because they wish to pay fewer taxes than they should.
At the moment, the IRS is strictly on the lookout for citizens with an income of over $2 million who failed to turn in their tax returns between 2017 and 2018. Kraken is not the only exchange the IRS has obtained information from before. The IRS has also sought similar information from Coinbase in the year 2016.