Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year.
Approximately 18.5 million of these forms pertained to transactions valued at less than $1, while over half were for $10 or less. Only 8.5% of the newly introduced 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, creating a reconciliation task for the taxpayer. Furthermore, standard tax software does not support cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active crypto holders.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken identifies two key issues: 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 exchange is advocating for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed, either at receipt or at sale.