Kraken, a cryptocurrency exchange, has filed 56 million forms with the US Internal Revenue Service for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1. Over half of the forms were for transactions worth $10 or less.
According to Kraken, this creates a substantial reporting burden, with each form requiring reconciliation by the taxpayer. The company estimates that active cryptocurrency holders may incur additional costs of $250-$500 per year for dedicated tax software, on top of standard filing costs.
Kraken attributes this issue to two problems in the tax code: the lack of a de minimis exemption for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt. The company is advocating for a broader, inflation-indexed exemption and the ability for taxpayers to choose when staking rewards are taxed.