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, and over half were for $10 or less. The lack of a de minimis exemption for crypto payments and staking rewards has created a substantial reporting burden.
Only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, and 74% were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
Kraken estimates the additional burden on an active crypto holder to be $250-$500 per year for dedicated tax software, in addition to standard filing costs. The exchange highlights two issues with the tax code: the absence of a de minimis exemption for crypto 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 elect when staking rewards are taxed.