Key TakeawaysÂ
- Kraken is a regulated US crypto exchange and shares user data with the IRS.
- Starting in 2026, Kraken and other brokers must issue Form 1099-DA reporting capital gains for cryptocurrency.
Cryptocurrency exchanges around the world are starting to report more and more information to government agencies. In this guide, we analyze Kraken’s tax reporting policies within United States. We’ll also break down a simple way to report your Kraken taxes in minutes.
What is Kraken?
Kraken is one of the world’s most trusted and oldest cryptocurrency exchanges. As a regulated broker, Kraken requires Know Your Customer (KYC) verification for all users.
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Kraken complies with IRS reporting requirements and shares information on taxable income via 1099 forms. Previously, Kraken was forced to share customer information with the IRS via John Doe Summons.
Does Kraken report to the IRS?
Yes. Kraken reports user data and transactions to the IRS.
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- Form 1099-DA: Starting with the 2025 tax year (forms sent in 2026), Kraken and all US brokers must issue Form 1099-DA, reporting gross proceeds from digital asset sales.
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- Past enforcement: The IRS has previously obtained customer data from Kraken through court orders.
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- ‍Blockchain visibility: Remember, transactions on blockchains are publicly visble. All withdrawals to personal wallets (e.g., MetaMask or Trust Wallet) can be traced on the blockchain and can be matched back to your Kraken account.
Do I owe taxes if I use Kraken?
Yes. All activity on Kraken is taxable in the US:
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- Capital gains. Selling, trading, or spending crypto is a taxable disposal. You’ll owe capital gains tax based on how the price of your crypto has changed since you originally received it.Â
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- Ordinary income. Earning through staking, rewards, or referral bonuses is taxed as income based on its fair market value at the time of receipt.Â
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Remember, transferring crypto between wallets you own is not taxable.
Does Kraken have KYC?
Yes. Kraken requires all users to complete KYC before trading. This includes verifying your name, address, date of birth, and providing a picture of a government-issued ID.
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Is Kraken legal in the US?
Yes. Kraken is licensed to operate in the United States. It’s one of the world’s most secure and trusted exchanges!
How do I avoid Kraken taxes in the US?
You cannot legally evade taxes. But you can take steps to legally reduce your taxes:Â
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- Tax-loss harvesting. By selling crypto at a loss, you can offset $3,000 of income and an unlimited amount of capital gains. Additional losses can be rolled forward to future tax years!Â
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- Using cryptocurrency tax software.Crypto tax software like CoinLedger can automatically import your Kraken transactions and identify tax-saving opportunities.
Get a Kraken tax report today
Looking for a simple way to report your Kraken taxes? With CoinLedger, you can import your Kraken transactions and auto-generate a complete gains, losses, and income tax report in minutes.
CoinLedger integrates with Kraken and dozens of other wallets, blockchains, and cryptocurrency exchanges to automate the entire crypto tax reporting process.
You can get started with a free preview report today.
