Binance executives secretly briefed Binance VIP traders on a massive $4.3B US settlement at a dinner in Singapore.
- Following a court order from June, Kraken, a cryptocurrency exchange, is slated to provide user information to the IRS in the upcoming month.
- The information pertains to U.S. Kraken clients who engaged in transactions of more than $20,000 between the years 2016 and 2020.
Kraken to Share User Data with IRS Next Month
Next month, in compliance with a court mandate, Kraken will begin disclosing certain customer data to the IRS.
The decision stipulates that the exchange anticipates the transfer of the specified data to commence in November 2023.
The conflict between the IRS and Kraken was sparked in May 2021.
It was then that the IRS received authorization from a US court to issue a John Doe summons to Kraken.
The IRS accused Kraken of non-compliance with the summons at that stage.
Fast forward to February 2023, the IRS submitted a legal document requesting the court’s approval to enforce the summons.
The culmination of these events was in June when a federal court decreed that Kraken must surrender certain customer data.
What Information Must Kraken Give Away?
Per the June court directive, Kraken must give data on customers who engaged in transactions worth $20,000 and more.
The mandate requires the disclosure of various information. It includes names, birthdates, taxpayer IDs, addresses, phone numbers, email addresses, and transaction histories across the specified period.
The IRS’s original demand was more exhaustive, seeking IP addresses, occupational information, wealth sources, net worth, and banking details.
Kraken communicated that it persuaded the court to limit the scope of the data and the number of clients implicated.
Specifically, the updated court order affects 42,017 clients, a reduction from the IRS’s initial target of 59,331.
This development doesn’t mark the first instance of a crypto entity divulging user information to the IRS.
In 2018, Coinbase had already cooperated with the IRS, revealing data related to approximately 13,000 users.
How Could This Affect the End Customer?
The disclosure of sensitive data to the IRS could have several implications for Kraken’s end customers.
Primarily, users might lose trust or feel their privacy is violated because they expect confidentiality.
This situation could particularly affect users unaware of their tax liabilities and thus face potential legal consequences.
Furthermore, this move could create a sense of uncertainty among the crypto community, possibly influencing users to close accounts.
The same happened when the SEC ordered Coinbase to delist all assets except Bitcoin.
The incident underscores the importance of regulatory compliance and awareness for individuals engaging in substantial cryptocurrency transactions.
Beyond immediate impacts, this event might prompt demand for a detailed understanding of tax obligations among crypto investors.
Do you think that Kraken will have to suffer from this decision?