Kraken files suit against the U.S. Internal Revenue Service

The Kraken cryptocurrency exchange has filed a lawsuit against the U.S. Internal Revenue Service (IRS), which has demanded that the platform disclose user data. This is reported by Bloomberg.

The company denies the regulator’s right to obtain information about transactions involving digital assets. Kraken called the IRS’s demands “an unwarranted treasure hunt.”

However, representatives of the agency say their actions are aimed at identifying individuals who evade taxes.

In February 2023, the IRS filed a petition seeking certain Kraken customer data. The requests concern users with trading volumes over $20,000 in 12 months between 2016 and 2020.

In 2017, a similar court case occurred between the IRS and the Coinbase exchange. Back then the tax authority also requested information on clients who had earned profits of at least $20,000.

Despite the company’s attempts to challenge the request, the court ordered the disclosure of data for more than 14,000 accounts.

“Many Coinbase users may not have reported income in digital assets, so the IRS’s interest is quite legitimate in this investigation,” the judge said.

In March, Kraken confirmed the launch of its own bank, despite regulatory headwinds.

In April, the exchange’s subsidiary obtained a license in Ireland as a virtual asset service provider.