TLDR
- Kraken filed 56 million crypto transaction forms with the IRS for the 2025 tax year.
- About 18.5 million of the reported transactions were worth less than $1.
- More than half of the filed forms covered transactions of $10 or less.
- Only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 reporting threshold.
- Kraken said brokers reported gross proceeds without including cost basis information.
Kraken reported that it filed 56 million crypto transaction forms with the U.S. Internal Revenue Service for the 2025 tax year. The exchange said about 18.5 million forms covered transactions worth less than $1. It added that more than half of all reported transactions involved amounts of $10 or less.
The company disclosed the figures in a blog post released on Wednesday. It stated that only 8.5% of the new Form 1099-DAs exceeded $600. That threshold triggers reporting for non-employee compensation under existing tax rules.
Kraken Reports Millions of Low-Value Transactions
Kraken said 74% of the filed forms covered transactions under $50, and it stressed the volume of small entries. Each Form 1099-DA also goes to customers, and it creates a reconciliation task for every recipient. The exchange said standard tax software does not manage crypto transactions, and it estimated extra costs of $250 to $500 yearly for dedicated tools.
The company cited estimates from the Tax Foundation and the National Taxpayers Union Foundation. It said Americans already spend about $146 billion on individual returns each year. It added that non-business filers spend about 13 hours and $290 per return, according to the foundation.
Brokers reporting for 2025 provide gross proceeds without cost basis information. Therefore, the form shows what a customer sold but excludes the purchase price. Kraken said it received thousands of client questions about forms that listed only one side of the calculation.
Crypto Tax Rules on Micro Payments and Staking
Kraken identified two areas of the tax code that it said create compliance issues. One concerns the absence of a de minimis exemption for small crypto payments. As a result, even minor purchases can trigger a taxable event under current rules.
The company offered an example to illustrate the requirement. “Imagine you walk into a Steak ’n Shake and pay for a $7.99 meal with Bitcoin,” Kraken wrote. It said the customer must determine cost basis, calculate gain or loss, and report the result on Form 8949.
Kraken also addressed the treatment of staking rewards. It said tax law treats rewards as ordinary income at the moment of receipt. Therefore, holders owe tax based on the token’s market price on that day.
The exchange said many users keep their staking rewards instead of selling them. If token prices fall later, the tax owed can exceed the asset’s current value. Kraken called this situation “phantom income” and said many sub-$1 forms related to staking distributions.
Legislation moving through Congress includes a de minimis provision limited to stablecoins. Kraken said it supports a broader, inflation-indexed exemption with anti-abuse guardrails. The exchange also asked Congress to let taxpayers choose whether to tax staking rewards at receipt or at sale, and it said its systems already support both reporting methods.
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