Cryptocurrency exchange Kraken 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 pertained to transactions valued at less than $1, with over half being for $10 or less. The newly introduced Form 1099-DA, which is used to report cryptocurrency transactions, showed that only 8.5% of the forms exceeded the $600 threshold, which triggers reporting for non-employee compensation.
Furthermore, 74% of the forms were for transactions valued at less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer. Additionally, standard tax software does not support cryptocurrency transactions, leading to an estimated additional burden of $250-$500 per year for active cryptocurrency holders.
Kraken emphasized that the time spent by taxpayers reconciling these micro-transactions, often with incomplete data, generates costs that are disproportionately high compared to the revenue the IRS will collect from them. The exchange also pointed out that the lack of a de minimis exemption for cryptocurrency payments and staking rewards creates significant problems. For instance, even small purchases made with cryptocurrency can trigger a taxable event, and rewards earned from staked assets are treated 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, either at receipt or at sale.