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Kraken Pushes for Crypto Tax Reform
Kraken filed 56 million crypto tax forms for 2025, with a third covering transactions under $1, illustrating the absurd compliance burden of current IRS rules that treat every coffee purchase with Bitcoin as a taxable event.
What: Kraken submitted 56 million 1099-DA forms to the IRS, with 18.5 million covering sub-$1 transactions and 74% under $50. The exchange is now lobbying Congress for a de minimis exemption for small crypto payments and the option to tax staking rewards at sale rather than receipt.
Why it matters: Current tax rules create phantom income problems where users owe taxes on unrealized staking rewards, and require detailed cost-basis calculations for trivial purchases like a $7.99 meal paid with Bitcoin, adding $250-$500 in specialized tax software costs per active user.
Takeaway: If you're building crypto payment apps, factor in that each transaction creates tax reporting complexity that current software doesn't handle well, and watch for de minimis legislation that could change the calculus.
Original article
Kraken filed 56 million 1099-DA forms for 2025, with 18.5 million covering sub-$1 transactions, underscoring the compliance burden created by current IRS reporting requirements.
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