Kraken Urges US De Minimis Crypto Tax Exemption

Kraken urged Congress to adopt a de minimis tax exemption after the exchange reported it issued more than 56 million 1099-DA forms to the Internal Revenue Service for 2025. About 18.5 million of those forms were tied to transactions worth less than $1, roughly 28 million covered transactions of $10 or less, and about 75% of reported events involved amounts under $50.

In a blog post on Wednesday, the exchange said the exemption should exclude small, routine digital-asset payments from capital gains reporting to eliminate millions of unnecessary forms.

Kraken also called for a change to how staking rewards are taxed, arguing current IRS guidance can create “phantom” income by taxing holders on the value of rewards they have not sold or otherwise realized. The exchange said taxing unrealized staking rewards forces taxpayers to pay on gains that remain on-chain and outside their control.

Kraken wrote, “This is not about helping crypto companies. It is about 55 million Americans, spanning every state, age bracket and industry, who are navigating a tax system designed before digital assets existed.”

The exchange contrasted its proposal with a recent congressional draft that would require reporting only for stablecoin transactions under $200. Kraken’s request would broaden an exemption to cover small payments across digital-asset types.

Tax Foundation data cited by the exchange estimate that preparing individual tax returns costs U.S. taxpayers about $146 billion in time and out-of-pocket expenses. The IRS ended its free Direct File program in November 2025, increasing reliance on paid software and tax preparers for many filers.

Kraken filed for a confidential initial public offering with the Securities and Exchange Commission in November 2025. Co-CEO Arjun Sethi told an audience in April that the company would likely proceed with a public listing soon.

The exchange asked lawmakers to reduce paperwork, simplify reporting for routine low-value digital-asset transactions and address the taxation of staking rewards.