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 transactions were valued at less than $1, and over half were worth $10 or less.
The newly introduced Form 1099-DA shows that only 8.5% of transactions exceeded the $600 threshold, which triggers reporting for non-employee compensation. Furthermore, 74% of the transactions were valued at less than $50. Each form is sent to the customer, resulting in a reconciliation task for the taxpayer. Kraken estimates that active cryptocurrency holders face an additional annual burden of $250-$500 for dedicated tax software, on top of standard filing costs.
The company argues that the time spent reconciling micro-transactions often results in costs that are disproportionate to the revenue generated for the IRS. The Tax Foundation estimates that individual returns already cost Americans $146 billion in time and expenses.
Kraken identifies 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. The company is advocating for a broader inflation-indexed exemption and the option to tax staking rewards at the time of sale, rather than receipt.