Kraken just filed 56 million tax information forms for the 2025 tax year under the IRS's digital asset broker reporting requirements. One-third of those forms, roughly 18 million, reported gross proceeds of less than one dollar. This is the first major data point showing what the new reporting regime actually looks like in practice, and it raises serious questions about whether the framework is working as intended.
What Actually Happened
Under the Treasury's final regulations implementing Section 6045 for digital asset brokers, exchanges like Kraken are now required to report gross proceeds from crypto transactions on Form 1099-DA. The 2025 tax year was the first full year these requirements were in effect.
Receive future blog posts by email.
Kraken complied. Fifty-six million forms.
The exchange has publicly advocated for de minimis thresholds that would exempt small transactions from reporting. When a third of your filings cover amounts under a dollar, that position makes operational sense. The admin headache is huge, and the IRS isn't collecting anything meaningful from these micro-transactions.
What This Means Operationally
If you're running compliance at a digital asset platform, this data point matters for several reasons:
- Volume creates risk. Fifty-six million forms means fifty-six million opportunities for errors in TINs, addresses, cost basis calculations, and transaction categorization. Your error rate might be low in percentage terms, but the absolute number of potential issues scales with volume.
- De minimis advocacy is gaining momentum. Kraken is not alone in pushing for transaction thresholds. The more data that emerges showing millions of sub-dollar filings, the stronger the case for regulatory adjustment becomes. Watch for Treasury guidance or legislative movement here.
- Customer inquiries will spike. Many retail users receiving a 1099-DA for the first time will be confused, especially when the form shows dozens or hundreds of micro-transactions they don't remember. Your customer support and compliance teams need to be prepared.
The Cost Basis Problem Isn't Solved
The 2025 reporting year only required gross proceeds reporting. Cost basis reporting phases in for 2026, which means the operational complexity increases significantly next year. If you struggled with 2025 volume, start planning now.
What You Should Do
First, audit your 2025 filing process. Identify where errors occurred and what drove them. Second, assess your systems' capacity to handle cost basis tracking at scale for 2026. Third, monitor IRS and Treasury communications for any de minimis relief, but don't build your compliance program around regulatory changes that haven't happened yet.
The current framework is what it is. Comply with what's on the books today, and advocate for sensible adjustments through proper channels.
Subscribe to Regulated Intelligence Brief
Get new compliance intelligence delivered to your inbox.
Key Takeaways
Are there any de minimis thresholds for crypto tax reporting currently in effect?
No. The current Section 6045 regulations for digital asset brokers do not include a de minimis threshold. Every reportable transaction must be filed, regardless of the amount. Industry advocacy for thresholds is ongoing but nothing has been adopted.
When does cost basis reporting become required?
Cost basis reporting phases in for the 2026 tax year. The 2025 requirements only covered gross proceeds. This means your operational complexity for next year's filings will be substantially higher.
How should we prepare for increased customer inquiries about 1099-DAs?
Build FAQ documentation now explaining what the form is, why customers are receiving it, and what common transaction types look like. Train your customer-facing staff on basic tax reporting concepts and establish clear escalation paths for complex questions you can't answer without providing tax advice.
The content in this blog is for informational purposes only and does not constitute legal advice, regulatory guidance, or an offer to sell or solicit securities. GiGCXOs is not a law firm. Compliance program requirements vary based on business model, customer base, and regulatory classification.