Kraken Urges US Tax Reform to Eliminate Micro-Transaction Reporting

Kraken has formally requested changes to US tax policy following the issuance of 56 million 1099-DA tax forms for the 2025 reporting year. The exchange argues that the current system creates an unnecessary bureaucratic burden for both the company and its users, citing a massive volume of negligible transactions. The push for reform centers on the inefficiency of reporting micro-transactions. Kraken revealed that approximately 18.5 million of its filed forms were for transactions valued at less than $1, while 28 million were for amounts under $10. In total, 75% of the forms were for transactions under $50. The exchange is proposing a 'de minimis' exemption that would exclude small, routine digital asset payments from capital gains reporting. Additionally, Kraken is targeting 'phantom income,' where users are taxed on staking rewards based on value they have not yet realized through a sale. This advocacy comes as the industry seeks a tax framework tailored to the unique nature of digital assets. While some congressional drafts have suggested reporting thresholds for stablecoins under $200, a broader exemption for other assets remains elusive. Separately, Kraken co-CEO Arjun Sethi recently indicated that the company is likely to proceed with its initial public offering (IPO) soon, following a confidential filing with the SEC in November 2025.