United States Government Demands Kraken Provides User Information to IRS

The United States Department of Justice has granted the country’s Internal Revenue Service (IRS) permission to submit a request for transaction information on users who have transacted more than $20k during the 2016 to 2020 period.

The requests, commonly known as a “John Doe summons,” are designed to find information about any US taxpayer who fulfilled the conditions mentioned above, with its range extending to Kraken and its parent company Payward Ventures Inc.

Acting Assistant Attorney General of the Justice Department’s Tax Division, David A. Hubbert, referred to the decision by stating:

“Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws, Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer”

The IRS is currently running an “investigation of an ascertainable group or class of persons” who it claims might have failed to comply with their tax obligations, which could result in economic and legal consequences for those involved.

While the press release states that Kraken is not under suspicion of any wrongdoing at the time, the IRS will also check if the exchange has been compliant with current regulations, including anti-laundering policies and know-your-customer (KYC) rules.

The Summon is Becoming a Recurring Practice

The decision by the Department of Justice (DOJ) is not an isolated case as the entity has previously granted the IRS permission to submit a John Doe summons to Coinbase and Circle Internet Financial.

The DOJ approved the request regarding Coinbase back in November of 2016, stating back then that, “Transactions in virtual currency are taxable just like those in any other property.”

In that instance, the summon didn’t specify a minimum value for the transactions of users who needed to have their data requested, which was received with criticism by the crypto community.

Earlier this year, a similar request was…

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