Kraken files millions of tax reports in a year, most under $1

Traders Union
All News
Crypto
Kraken files millions of tax reports

A waste of time

According to the company, the workload is disproportionate to any potential tax revenue. Users spend hours processing countless small transactions, often with incomplete data. At the same time, the forms only show gross proceeds without the original purchase price, which leads to confusion and additional questions.

Kraken highlights two key issues in the current framework. The first is the absence of a de minimis threshold — meaning even small crypto payments are taxable events. For example, if a user pays $7.99 for a meal in Bitcoin, they are required to calculate any gain or loss on that fraction of the asset and report it.

The second issue involves staking. Rewards from staking are taxed as ordinary income at the time of receipt, based on the token’s market price. However, most users do not sell these tokens immediately, which can lead to situations where the asset’s price drops but the tax is still owed — sometimes exceeding the current value of the tokens. Kraken refers to this as “phantom income” and notes that many of the low-value forms are related to staking rewards.

Lawmakers in the U.S. Congress are already discussing changes, including the introduction of a de minimis exemption, though it currently applies only to stablecoins. Kraken is pushing to expand this rule to all crypto transactions and allow taxpayers to choose when staking rewards are taxed — either upon receipt or upon sale. According to the company, such solutions are technically feasible but require regulatory approval.

No universal solution yet

Globally, there is still no unified approach to crypto taxation. Each country sets its own rules: in some places, crypto is taxed as ordinary income, in others as capital gains, and in certain jurisdictions there is still a lack of clear regulation. As a result, users and companies face very different levels of complexity — from minimal requirements to highly burdensome systems like in the United States.

Against this backdrop, competition for the status of a global crypto hub is intensifying. Countries that can offer simple, transparent, and practical tax frameworks will likely attract more capital and businesses. Jurisdictions often cited in this context include Lugano in Switzerland, which активно integrates crypto into its economy, as well as Dubai, Singapore, Hong Kong, and El Salvador. These “crypto havens” are betting on clear rules to secure a leading role in the emerging financial system.

As a reminder, we previously compiled a ranking of countries with zero crypto tax rates.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.