- The tax authorities were interested in information about all clients who conducted crypto transactions in the amount of more than $20,000
- The IRS is investigating traders who understate their earnings.
- Kraken filed a counterclaim, relying on precedent in the Coinbase case
In February of this year, the U.S. Internal Revenue Service (IRS) filed a lawsuit to enforce the subpoena against Kraken. The IRS required the exchange to provide information about users as part of an investigation into non-payment.
In particular, the IRS is interested in data on Kraken clients who carried out cryptocurrency transactions worth more than $20,000 between 2016 and 2020.
The tax authority claims that it filed a corresponding request back in 2021, but the company ignored it. In a February lawsuit, the IRS insists on enforcement of the requirement.
Kraken this week filed a counterclaim. The firm is petitioning for the request to be dismissed because the IRS has substantially overstepped its authority and its claims are based on a much weaker basis than in a similar case against Coinbase.
“Instead of following the earlier precedent, the IRS has increased its appetites and gives them little justification” – the lawsuit says.
In the case against Coinbase, the IRS was interested in the data of about 14 thousand users. Initially, the sample was larger, but the department had to make concessions. But even then, the exchange resisted the demand.
The IRS v. Kraken hearing will take place next month. If the requirement of the department is satisfied, the platform will have to provide all the necessary information, after which fines will fall on its customers.
Interestingly, the lawsuit from the tax authorities was filed the day after the Kraken deal with the SEC (Securities and Exchange Commission). Recall that the exchange agreed to suspend staking programs in the United States and paid a fine of $30 million.