Kraken, a cryptocurrency exchange, has filed 56 million forms with the US Internal Revenue Service (IRS) for the 2025 tax year, covering various crypto transactions. Approximately 18.5 million of these forms pertained to transactions valued at less than $1, and over half were for $10 or less. The company noted that only 8.5% of the new Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, and 74% were for less than $50.
Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer. Furthermore, standard tax software does not handle cryptocurrency transactions, and Kraken estimated the additional burden on active crypto holders to be between $250 and $500 per year for dedicated tax software, excluding standard filing costs.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken pointed to two issues in 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. The company is advocating for a broader inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed, either at receipt or at sale.