Kraken Calls for Court Intervention Against IRS Demands
- Kraken and Coinbase are putting up significant fights against US regulators.
Kraken, a crypto exchange, has sought intervention from the court against the Internal Revenue Service’s (IRS) request for access to sensitive user data. The IRS’s request for client information was described by the exchange as an “unjustified treasure hunt.”
According to a Bloomberg report, Kraken sought the involvement of a federal court in San Francisco in a bid to push back against the IRS. Earlier this year, the IRS demanded extra user information to help locate Kraken accounts that engaged in at least $20,000 worth of crypto trading annually between 2016 and 2020.
Kraken, however, claimed that the IRS had violated the guidelines established by the U.S. District Judge Jacqueline Scott Corley in its request, citing the Coinbase case from 2017. The IRS notably withdrew some of its demands in the case against Coinbase after the US exchange repeatedly denied granting the request.
However, Judge Corley ruled that the notice issued to more than 14,000 Coinbase users was not entirely intrusive, as the IRS had a good basis for seeking to investigate taxpayers who might not be revealing their Bitcoin profits.
The future of the crypto industry in the US faces huge uncertainty. Kraken has joined Coinbase in a fight against US regulators seeking to regulate the industry. Coinbase has had its fair share of troubles with the US Securities and Exchange Commission (SEC).
The SEC claims that companies like Kraken and Coinbase that offer staking services are in violation of securities laws. Although Kraken reached a $30 million settlement with the SEC for providing staking services, it has chosen to go to court to challenge the IRS’s demands.
I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.
