Kraken, a prominent crypto exchange, has filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1.
Over half of the forms were for transactions worth $10 or less. According to Kraken, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, while 74% were for less than $50.
The company emphasized that each form is also sent to the customer, creating a reconciliation task for the taxpayer. Furthermore, standard tax software does not support crypto transactions, resulting in an estimated additional burden of $250-$500 per year for active crypto holders. Kraken argued that the time spent reconciling these micro-transactions generates costs that are disproportionate to the revenue the IRS will collect.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken identified two key issues with the tax code: the lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt. The exchange is advocating for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed, either at receipt or at sale.