Iris Coleman
Apr 23, 2026 03:43
Kraken calls for US crypto tax reforms, including a de minimis exemption and changes to staking income rules, after issuing 56M tax forms in 2025.
Kraken, one of the largest cryptocurrency exchanges in the United States, has called for significant tax policy reforms after issuing an eye-popping 56 million tax forms for the 2025 tax year. In a blog post on April 22, the company advocated for a de minimis exemption on small crypto transactions and changes to the treatment of staking income, arguing these moves would reduce bureaucratic overload and ease compliance burdens for millions of taxpayers.
The exchange revealed that nearly 18.5 million of the tax forms it issued were tied to transactions valued at less than $1, and 75% of all forms reported amounts under $50. Kraken characterized the current reporting requirements as “millions of unnecessary forms” generated by trivial transactions. Under current IRS rules, every taxable event—no matter how small—must be reported, creating administrative headaches for both exchanges and users.
Kraken’s centerpiece recommendation is a de minimis exemption that would exclude small, routine crypto transactions from capital gains reporting. Such exemptions are not unprecedented; for example, foreign currency transactions under $200 are already exempt from similar reporting requirements under U.S. tax law. The exchange also proposed ending the taxation of so-called “phantom income” from staking rewards, which requires taxpayers to report and pay taxes on cryptocurrency rewards they have not yet sold or converted.
“This is not about helping crypto companies,” Kraken emphasized in its statement. “It’s about simplifying life for 55 million Americans who are using a tax system designed before digital assets existed.”
Staking Income: A Contentious Issue
Staking rewards have been a regulatory gray area in U.S. tax policy. According to IRS guidelines, staking income is taxable at the time a user gains “dominion and control” over the rewards, meaning when they are free to use or transfer the assets. Taxpayers are required to report the fair market value of the rewards as income, and any future sale or transfer triggers capital gains taxes. This double taxation framework has been criticized for being overly burdensome and out of sync with the nature of staking.
The IRS clarified its stance on staking income in Revenue Ruling 2023-14, confirming that rewards are taxable as ordinary income upon receipt. Kraken’s push for reform could resonate with taxpayers frustrated by the complexities and financial implications of these rules, especially as staking becomes more popular.
Congressional Proposals Offer Limited Relief
While some lawmakers have floated the idea of a de minimis exemption for crypto transactions, recent legislative drafts have been narrow in scope. The most recent proposal in Congress, for example, suggests exempting only stablecoin transactions under $200 from IRS reporting requirements—leaving Bitcoin (BTC) and other cryptocurrencies out of the equation entirely.
Tax compliance costs are also a growing concern. A March 2026 report from the Tax Foundation estimated that U.S. taxpayers spend $146 billion annually on tax preparation, including time and out-of-pocket expenses. Meanwhile, the IRS’s decision to end its free Direct File program in late 2025 has only added to the financial strain.
Kraken’s IPO Plans Still on the Table
Beyond tax reform, Kraken’s leadership has signaled that the company is still considering an initial public offering (IPO). After filing confidentially with the SEC in November 2025, Kraken co-CEO Arjun Sethi recently indicated that the exchange could go public soon, despite challenging market conditions.
The push for tax reform, combined with an IPO on the horizon, underscores Kraken’s broader strategy to position itself as a leader in both crypto innovation and regulatory dialogue. As U.S. lawmakers and regulators continue to grapple with the complexities of digital assets, Kraken’s proposals could influence how the industry and its users are taxed in the years to come.
For now, all eyes will be on Congress to see whether these reforms gain traction—and whether the crypto industry can finally see some relief from its onerous tax obligations.
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