Key Points
- The exchange submitted 56 million cryptocurrency transaction forms to the IRS for the 2025 tax year.
- Approximately 18.5 million transactions had values below $1.
- Over half of the submissions involved transactions valued at $10 or lower.
- Just 8.5% of the Form 1099-DAs filed surpassed the $600 reporting threshold.
- The exchange noted that brokers submitted gross proceeds data without cost basis details.
Kraken announced it submitted 56 million cryptocurrency transaction forms to the U.S. Internal Revenue Service covering the 2025 tax year. The platform revealed that roughly 18.5 million forms documented transactions valued under $1. Additionally, the exchange confirmed that over half of all submitted transactions represented amounts of $10 or below.
The exchange shared these statistics through a blog post published on Wednesday. The data showed that merely 8.5% of the newly implemented Form 1099-DAs surpassed $600. This particular threshold activates reporting requirements for non-employee compensation according to current tax regulations.
Exchange Details High Volume of Minimal-Value Entries
Kraken revealed that 74% of submitted forms documented transactions below $50, emphasizing the substantial volume of modest entries. Customers receive copies of each Form 1099-DA, generating reconciliation responsibilities for every individual recipient. The platform noted that conventional tax preparation software lacks proper crypto transaction management capabilities, projecting additional annual costs ranging from $250 to $500 for specialized tools.
The exchange referenced projections from the Tax Foundation alongside the National Taxpayers Union Foundation. The data indicates Americans currently allocate approximately $146 billion annually on individual tax returns. Furthermore, non-business filers typically invest around 13 hours and $290 per return, based on foundation research.
Brokers submitting reports for 2025 furnished gross proceeds figures while omitting cost basis data. Consequently, the forms display what customers sold while leaving out acquisition prices. Kraken mentioned receiving thousands of customer inquiries regarding forms showing only partial transaction information.
Compliance Challenges for Small Transactions and Staking Income
Kraken highlighted two specific areas within the tax code that generate compliance difficulties. The first involves the lack of a de minimis exception for minor cryptocurrency payments. Consequently, even trivial purchases can generate taxable events under existing regulations.
The platform provided a practical scenario to demonstrate this requirement. “Imagine you walk into a Steak ‘n Shake and pay for a $7.99 meal with Bitcoin,” Kraken explained. The customer must establish cost basis, compute gain or loss, and document the outcome on Form 8949.
Kraken further examined how staking rewards are handled under tax law. Current regulations classify rewards as ordinary income at the time of receipt. This means holders face tax obligations based on the token’s market value on the receipt date.
The platform observed that numerous users retain their staking rewards rather than liquidating them. When token values decline subsequently, the tax liability can surpass the asset’s present worth. Kraken described this circumstance as “phantom income” and indicated many sub-$1 forms connected to staking distributions.
Proposed legislation advancing through Congress contains a de minimis provision applicable exclusively to stablecoins. Kraken expressed support for a more comprehensive, inflation-adjusted exemption accompanied by anti-abuse protections. The exchange additionally urged Congress to permit taxpayers to select whether staking rewards face taxation at receipt or sale, noting its systems already accommodate both reporting approaches.
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