A federal district court in the Northern District of California ordered the Kraken cryptocurrency exchange to provide the Internal Revenue Service (IRS) with information about users who conducted large trades between 2016 and 2020.
According to the statement, the IRS issued Kraken the so-called “John Doe summons.” The agency is interested in data on customers who, in the period concerned, conducted transactions totaling more than $20,000 in a year.
The IRS suspects that some Kraken users evaded taxes. The court-approved summons will allow the agency to obtain information about all of the exchange’s customers who are named in it.
The agency will also verify whether the company complies with its customer-identification obligations.
“There is no justification for taxpayers continuing to hide income earned from cryptocurrency transactions. This summons is part of our efforts to identify those who attempt to evade reporting and do not pay their fair share of taxes,” said IRS Commissioner Chuck Rettig.
On April 1, 2021 the IRS issued a similar John Doe summons to the blockchain company Circle.
Coinbase was the first target. In 2016 a court allowed the IRS to obtain access to the exchange’s customer data. The company sought to appeal the decision but achieved only a loosening of the requirements.
Kraken is set to become a public company in 2022. According to its CEO, Jesse Powell, the exchange is using the direct listing procedure.
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