Crypto exchange Kraken has filed 56 million tax forms with the IRS for the 2025 tax year. Approximately 18.5 million of these forms, known as Form 1099-DAs, reported transactions valued at less than $1, with over half totaling $10 or less.
Kraken argues that the lack of a de minimis exemption for crypto payments and staking rewards, which are taxed upon receipt, creates a substantial reporting burden. The exchange estimates that active crypto holders spend an additional $250-$500 annually on tax software to reconcile these micro-transactions, costs disproportionately high compared to potential IRS revenue.
Two key issues identified by Kraken are the absence of a low-level exemption for crypto purchases and the taxation of staking rewards as ordinary income at the time of receipt, even if the assets are not sold. Kraken is advocating for legislative changes, including a broader de minimis provision and an option for taxpayers to elect when staking rewards are taxed.