Kraken Asks Court To Deny IRS Request To Identify Its Crypto Customers

Key Points:

• Kraken has applied to the federal court in San Francisco to refuse the request of the IRS.
• The exchange wrote in a court filing that the IRS’ request for information on cryptocurrency exchange users amounted to an “unjustified treasure hunt.”
• The court will hold a hearing on the case in May to hear arguments from both sides.

According to Bloomberg, in response to the Internal Revenue Service (IRS) requesting court approval in February to confirm the identity of Kraken crypto customers, the crypto exchange has applied to the federal court in San Francisco to refuse the request and has stated that it is investigating possible transactions.

When discussions about reducing the scope of the government’s investigation broke down, Kraken is now seeking a federal judge in San Francisco to urge the IRS to back down. According to the government, it is looking into people underreporting their tax burden.

In a court filing, Kraken said that the IRS’ request for information on cryptocurrency exchange customers amounted to an “unjustified treasure hunt,” far beyond what U.S. District Judge Jacqueline Scott Corley did with Coinbase almost six years ago.

The boundary was drawn in a similar lawsuit in 2019; instead of adopting the basic rules of that case’s ruling, the IRS upped the ante, making greater requests and relying on weaker reasons.

“Rather than abide by Coinbase’s ground rules, the IRS doubles down, making even more expansive requests and relying on a thinner rationale,” Kraken said in a filing.

In the instance of Coinbase, the government reduced its original request, but the business refused to back down. Corley finally determined that a summons targeting more than 14,000 users of the exchange was not too invasive since the IRS had a legitimate interest in investigating taxpayers who may not be reporting their Bitcoin earnings.

In May, the court will schedule a hearing to hear arguments from both sides. The IRS claimed in a petition to enforce its subpoena filed in February that it was looking for Kraken accounts that had at least $20,000 in crypto transactions in any one year between 2016 and 2020.

Kraken agreed to pay $30 million to satisfy Securities and Exchange Commission (SEC) charges that its staking service constituted an improper selling of securities.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Harold

Coincu News