Kraken urges de minimis tax rule after 56M 1099s

Kraken urged Congress to create a de minimis tax exemption after it issued more than 56 million 1099-DA forms to the Internal Revenue Service for 2025, the exchange wrote in a blog post Wednesday. Kraken reported about 18.5 million forms covered transactions under $1, roughly 28 million covered amounts of $10 or less, and about 75% were for amounts under $50. The exchange asked lawmakers to exclude small, routine digital asset payments from capital gains reporting and to end taxation on staking rewards that holders have not sold.

“This is not about helping crypto companies,” Kraken wrote. “It is about 55 million Americans, spanning every state, age bracket and industry, who are navigating a tax system designed before digital assets existed. Congress should act to make taxpayers’ lives easier.” The company framed the request as a measure to reduce paperwork and compliance burdens created by the new reporting rules.

The 1099-DA requirement requires brokers and exchanges to report digital asset transactions to the IRS beginning in 2025. Market participants have warned the rule could generate a large volume of low-value tax documents that investors must reconcile.

In the United Kingdom, the Financial Conduct Authority inspected eight locations this week in coordination with HM Revenue & Customs and the South West Regional Organised Crime Unit. Officials issued on-the-spot cease-and-desist notices ordering operators to halt activity while evidence is gathered for ongoing criminal investigations. The action targeted unregistered peer-to-peer crypto trading operations that allow individuals to exchange digital assets directly without a central intermediary.

“Unregistered peer-to-peer crypto traders operating in the UK are doing so illegally and pose a financial crime risk,” Steve Smart, the FCA’s executive director of enforcement and market oversight, stated. The FCA said no peer-to-peer crypto traders or platforms are currently registered with the regulator and described the raids as its first focused enforcement action against P2P trading, following earlier measures against illegal crypto ATMs and unlicensed exchange activity.

Separately, Tron founder Justin Sun filed a federal lawsuit in California against World Liberty Financial, the project behind the WLFI governance token. Sun alleged the project froze his tokens and threatened to burn them without proper justification and that private requests to unfreeze the tokens were refused. In a social media post, he wrote that he had tried in good faith to resolve the matter with the project team but was left with no choice but to seek relief in court.

Sun had earlier raised concerns about lengthy lockup periods for WLFI’s governance token and criticized a recent governance proposal that, he noted, appeared to concentrate 76% of voting tokens in 10 wallets. Filings describe World Liberty Financial as a project backed by members of the Trump family.