Cryptocurrency exchange Kraken is defying an investigation by the IRS regarding its users’ tax reporting. The IRS has increasingly focused on the cryptocurrency market over the past few years.
Cryptocurrency exchange Kraken is challenging authorities in the US, with Bloomberg reporting that the exchange is pushing back against the Internal Revenue Service (IRS). The latter is conducting what the Kraken considers an “unexplained treasure hunt”. The statement refers to an investigation currently being conducted by the IRS to determine if there are users who are not reporting their tax payments.
US cryptocurrency exchange under attack
Kraken resolution The narrowing of the investigation is a sign that crypto companies in the US are fighting back against what they see as unfair scrutiny. Kraken cited another exchange of his resistance against US authorities in a court filing,
“Instead of sticking to the basic rules of Coinbase, the IRS doubles down, making more expansive requests and relying on a thinner rationale.”
The statement refers to another dispute the IRS had with Coinbase more than six years ago. The data and responses indicate that Kraken and other crypto companies will not allow themselves to be outsmarted.
It’s not that Kraken is totally against scrutiny. The exchange stated that it was filing papers for pre-registration with the Ontario Securities Commission in Canada in an effort to become a registered exchange.
Kraken follows Coinbase in the fight again
Coinbase is another exchange that has proven to be tough when it comes to scrutiny. Currently, it is in a fight with the US Securities and Exchange Commission (SEC). CEO Brian Armstrong has even urged Congress to stop the SEC from intervening too much in the cryptocurrency industry.
Coinbase has filed a petition against the SEC asking for more clarity, which is a sign of its intent to retaliate. The move seeks to force the SEC to respond yes or no to Coinbase’s pending rulemaking petition.
Coinbase’s bid to block the IRS probe was lost in 2017
About six years ago, it was the IRS and request information About accounts on Coinbase. In fact, the exchange lost its bid to block the investigation. The agency ordered Coinbase to report more than 14,000 users.
Such moves by the US authorities have angered the cryptocurrency community, who believe it has been overreached. Moreover, taxes and KYC remain the biggest concerns of the authorities in the United States. Therefore, these incidents are unlikely to be the last of their kind.
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