Large bitcoin exchange must submit customer data to the tax authorities

A judge has ordered the crypto exchange Kraken to submit the transaction history and account information of its customers to the US tax authority, the Internal Revenue Service (IRS). The IRS says it needs the data to determine whether any US citizens are committing tax evasion. This is evident from court documents published on Friday.

Bitcoin exchange Kraken must submit customer data to IRS

In February, the IRS filed a request to see Kraken’s records. This came just after Kraken and the U.S. Securities and Exchange Commission (SEC) reached an agreement over the SEC’s allegations that Krakens strike service the securities law violated. The judge accepted the request yesterday. Kraken has to hand over a lot of data from users who traded more than $20,000 in a year to the tax authorities.

Among other things, Kraken must share the customer’s name, date of birth, and tax identification number with the IRS. The address, telephone number, e-mail address and numerous other documents must also be submitted. In addition, the IRS will also have access to the digital records of US citizens, including the blockchain address and the transaction hashes of the user.

Judge rejects request for employment data

In contrast to the myriad of data the IRS receives, the judge in question, Joseph Spero, has ruled that the IRS should not have the employment data and source of income of Kraken’s customers. Several attempts by the IRS to collect this information have been rejected by him. In explanation, the judge wrote:

“The court must determine whether the scale of the government’s request is narrow enough, meaning not wider than necessary to achieve the goal.”

The judge refers to the large range of data that the IRS has requested. The court must first determine whether the employment data is necessary to detect tax evasion. The IRS will already have plenty of data from Kraken and even more the court seems superfluous.

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