Kraken Demands Congress Stop Taxing Tiny Coffee Purchases and Fix Staking Rules!

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Kraken to Congress: stop taxing every coffee and fix staking rules

Kraken reported processing 56 million cryptocurrency tax forms for the 2025 tax year, with the majority covering amounts under $50. They are now asking Congress to create a rule that exempts very small crypto transactions from taxes and to allow people to delay reporting taxes on staking rewards until they actually sell those rewards.

Summary

  • Kraken says it filed 56 million digital asset tax forms with the IRS for 2025, with roughly one‑third under $1 and nearly three‑quarters under $50.
  • The exchange is urging Congress to create a de minimis exemption for small crypto payments and to let taxpayers choose when to recognize staking rewards as income.
  • Kraken argues current rules create “massive friction for ordinary users” and misalign tax timing with how staking actually works on-chain.Kraken says it filed 56 million digital asset tax forms with the IRS for 2025, with roughly one‑third under $1 and nearly three‑quarters under $50.

This tax season, Kraken is highlighting a key issue: the US government taxes even small cryptocurrency transactions as if they were significant financial events.

Kraken reports it created approximately 56 million cryptocurrency tax forms for the 2025 tax year, as a result of new reporting requirements under the Infrastructure Act. These figures were shared with CoinDesk and detailed in the company’s US tax center resources.

Here’s the interesting part about how these transactions broke down: Out of the total, around 18.5 million – about a third – were for amounts less than $1. Most transactions – 74% – were under $50. Only a small percentage, 8.5%, were over $600, the amount that usually requires reporting to the IRS on forms like the 1099-MISC.

According to current IRS rules, every time you trade or spend cryptocurrency, it could be considered a taxable event, no matter how small the amount. Kraken explains that most crypto activities are taxed as either regular income or a capital gain, and things like trading, buying NFTs, earning staking rewards, and receiving airdrops are all taxable. This means you need to keep track of the original cost and current value of your crypto, even for very small transactions.

Kraken is now asking Congress to step in.

The exchange is requesting a legal rule that would exempt small, everyday cryptocurrency payments from taxes. They propose setting a minimum dollar amount for these payments – anything below that amount wouldn’t be subject to taxes – and automatically adjusting that amount over time to keep up with inflation.

Kraken is also urging lawmakers to change how staking rewards are taxed. Current IRS guidance, Revenue Ruling 2023‑14, requires people to report staking rewards as income as soon as they receive them, even if they don’t sell the tokens and their value later decreases. Kraken believes this approach is flawed.

Kraken believes a current tax rule is unnecessarily complex and can create discrepancies between reported income and a taxpayer’s available funds. They are requesting that Congress allow taxpayers to choose one of two methods: report staking rewards as regular income when received (the current system), or delay reporting until the rewards are sold, treating them as capital gains at that time.

Currently, the rules create a disconnect between how staking works in the broader crypto world – like on platforms such as Kraken, where rewards are constantly added and reinvested – and how the US government treats it. Without action from Congress, Americans could still face taxes on crypto rewards even if they haven’t actually sold any cryptocurrency, meaning even small transactions like buying lunch could trigger a tax reporting requirement.

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2026-04-23 00:04