Kraken, a cryptocurrency exchange, reported that it submitted 56 million cryptocurrency transaction forms to the U.S. Internal Revenue Service (IRS) for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, and 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. Kraken estimated the additional burden on an active cryptocurrency holder to be between $250 and $500 per year for dedicated tax software, on top of standard filing costs.
The company pointed to two issues with 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. Kraken is advocating for a broader inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed.