The IRS has targeted investors in Kraken, one of the largest digital currency exchanges.
The agency issued the “John Doe Summons,” demanding information on clients who made at least 20,000 transactions between 2016 and 2020. According to the US Department of Justice, a federal court released a decision on Wednesday. Its members were able to point out that this does not mean Kraken is being accused of wrongdoing by its management or clients.
Gathering information under a “subpoena” ensures that the judicial authority wants to ensure that none of the exchange’s customers are involved in money laundering and that they all comply with tax obligations, just as every other taxpayer in the United States. Acting Assistant Attorney David Hubbert made the announcement.
In addition to detailed details on clients’ tax liabilities, the court sought data on crypto exchanges’ compliance with the rules in broader financial transactions within the context of its sector.
This is not the first “warning” from the IRS in recent years for all US citizens who are still attempting to avoid paying taxes. As part of its global mission, the organization has also begun collaborating with private contractors. A cryptocurrency ecosystem is still a mysterious place for them with insane profitability. As a result, further lawsuits about the classification of crypto assets and a rise in tax payments are impossible. This is especially true if other American regulators join in on the process.
Coinbase, another American exchange, was prompt to alert its customers that they must properly report the number of transactions and comply with local laws.