Kraken, a cryptocurrency exchange, has filed 56 million forms with the US Internal Revenue Service (IRS) for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1, and over half representing transactions of $10 or less. Only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold that triggers reporting for non-employee compensation, with 74% being for less than $50. Each form also requires reconciliation by the taxpayer, resulting in additional costs.
Kraken estimates that the extra burden on active crypto holders amounts to $250-$500 annually for specialized tax software, on top of standard filing costs. The exchange identifies two key issues with the tax code: the lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt. Kraken advocates for a broader, inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed, either at receipt or at sale.