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, while 74% were for less than $50. Each form also requires reconciliation by the taxpayer, adding to the overall burden.
Furthermore, standard tax software does not handle cryptocurrency transactions, resulting in an estimated additional cost of $250-$500 per year for dedicated tax software. The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses.
Kraken identifies two key issues with the current 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 exchange is advocating for a broader, inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed.