A legendary sea monsterthe popular San Francisco-based cryptocurrency exchange, has been served with a court order by a judge in the United States, requiring disclosure of customer information to the Internal Revenue Service.
Access Kraken’s financial records and customer data
in a court petition Submitted this past February With the Northern District of California, the IRS has expressed its intention to conduct a thorough investigation of Kraken’s financial records and statements. The goal of this investigation is to identify cryptocurrency users who may have overlooked their tax obligations.
The IRS stated in the petition that its investigation seeks to establish the individuals’ identities and their valid federal tax liabilities.
This applies to those who engaged in cryptocurrency transactions during the years ending December 31, 2016, 2017, 2018, 2019, and 2020.
According to the IRS, a summons was sent to Kraken’s parent company, Payward Ventures Inc. , in 2021, to request customer information for traders who used the platform between 2016 and 2020.
The government believes it has valid grounds to require the materials specified in the subpoena. Ruling Judge Joseph C. Spiro, who presided over the case, said that the IRS is authorized to obtain items that may be potentially relevant to the ongoing investigation, regardless of their admission.
In response to the IRS request, Spero has granted an order authorizing Kraken, the cryptocurrency exchange, to disclose extensive user information.
The information includes full names, aliases or user IDs, dates of birth, taxpayer identification numbers, physical addresses, phone numbers, and email addresses.
This requirement applies to all Kraken users who have conducted transactions involving cryptocurrency assets, regardless of transaction type, with a combined value equal to or greater than $20,000 during any of the specified years.
Coinbase complies with the court order and discloses customer data to the IRS
In November 2017, Coinbase, a prominent cryptocurrency exchange, found itself bound by a San Francisco federal court order requiring it to disclose customer data to the IRS.
Despite strong resistance from America’s largest bitcoin broker, which has vehemently opposed what it viewed as a flagrant invasion of privacy and unjustified data acquisition, Coinbase sought to salvage its reputation by declaring a “partial victory” in its ongoing fight against the IRS.
The court ruling forced Coinbase to provide the tax agency with identifying information of users who were involved in transactions exceeding $20,000 between 2013 and 2015.
The IRS has directed its efforts toward uncovering individual cryptocurrency tax evaders, inadvertently entangling Coinbase in its quest for information.
The legal battle between the IRS and Coinbase has been cited several times during the Kraken-related court proceedings.
Featured image from Twitter, charts from TradingView.com