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 were for transactions valued at less than $1, with over half being for $10 or less. The company notes that 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 also requires the customer to reconcile the transaction, resulting in additional burden on taxpayers.
Kraken estimates that this burden can cost active crypto holders between $250 and $500 per year, excluding standard filing costs. The company attributes this issue to two problems: the lack of a de minimis exemption for crypto payments and the taxation of staking rewards as ordinary income upon receipt. Kraken argues that a broader, inflation-indexed exemption, paired with anti-abuse measures, is necessary to alleviate this burden. Furthermore, the company is advocating for taxpayers to have the option to choose when staking rewards are taxed, either at receipt or at sale, to reduce the complexity of tax reporting.