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A Californian court required Kraken to provide information on users who executed crypto deals for the equivalent of $20,000 or more between 2016 and 2020 to the IRS. The order comes amid growing concerns of strict cryptocurrency regulations coming for the United States.
âJohn Doe Summonsâ for Kraken
A federal court in the northern part of California gave the IRS permission to obtain information about crypto transactions completed by Krakenâs users. Following the so-called âJohn Doe summonsâ operation, one of the leading crypto exchanges had to provide data about its customers who made the equivalent of $20,000 or more in one year for the period between 2016 and 2020.
IRS Commissioner Chuck Rettig explained the agencyâs move saying that the US authorities aim to investigate a âascertainable group or class of verifiable personsâ who have failed to comply with tax returns and internal tax laws:
âThis summons from John Doe is part of our effort to uncover those who are trying to bypass the reporting and avoid paying their fair share.â
Additionally, Acting Deputy Attorney General David Hubbert of the Justice Departmentâs Taxation Division, specified that tax collection is vital and every individual should do it:
âThose who deal with cryptocurrency must meet their tax obligations like any other taxpayer.â
Despite the court requirements which Kraken will meet, the United States-based cryptocurrency exchange platform was not suspected to have done anything wrong.
Crypto Regulations in The US
The IRS crackdown appears like the United States is tightening the regulatory grip on the crypto space as Krakenâs CEO predicted last month. CryptoPotato reported when Jesse Powell asserted that the government might finally implement a legislative framework on the industry.
Moreover, the executive explained that the exponential growth of Bitcoin and many of the other altcoins have caught the attention of global watchdogs. In his statement, Powell was especially worried about FinCENâs proposal suggesting that people holding cryptocurrencies in private digital wallets need to verify their identities if they make transactions worth $3,000 or more:
âSomething like that can really hurt crypto and kind of kill the original use case, which was to just make financial services accessible to everyone.â
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