TLDR
Kraken, a major U.S. crypto exchange, is lobbying Congress to ease U.S. tax rules on everyday crypto use and staking rewards, but nothing has changed in law yet.
- Kraken disclosed filing 56 million IRS crypto tax forms and is urging a de minimis exemption so small everyday payments are not taxed or reported.
- The exchange also wants optional deferral of tax on staking rewards, arguing current rules create phantom income and heavy reporting burdens for normal users.
- Any relief depends on Congress, where broader digital asset bills like the Clarity Act are in play, so outcomes and timelines remain uncertain.
Deep Dive
1. What Kraken Is Asking For
Kraken revealed it filed 56 million Form 1099-DAs with the IRS for 2025, with about one third under 1 dollar and nearly three quarters under 50 dollars, illustrating how micro-transactions still trigger tax forms for users and the exchange itself. One report notes that only 8.5% of these transactions exceeded 600 dollars, a common information-reporting threshold in traditional finance.
In response, Kraken is pressing Congress for a statutory de minimis exemption: gains and losses on small crypto payments under a dollar amount (indexed to inflation) would simply not be taxable. It is also backing higher reporting thresholds so platforms are not forced to generate millions of low-value IRS forms for tiny transactions.
If adopted, many small coffee-sized crypto payments would become tax-ignored, reducing paperwork for both users and exchanges.
2. Why Staking Rules Are A Big Target
Under existing IRS guidance, staking rewards are taxed as ordinary income when the user has dominion and control, even if the tokens are never sold and later fall in price. Kraken argues this creates phantom income and complex tracking for anyone who stakes on-chain or via an exchange.
Its proposal is to let taxpayers choose: either keep the current rule (income at receipt) or defer recognition until sale, at which point rewards would be taxed as capital gains. That would better match how many users treat staking, where rewards are auto-compounded and not immediately liquid.
For active stakers, reform could simplify accounting and reduce the risk of owing cash taxes on tokens that have dropped in value.
3. How Realistic Is Change And What To Watch
Krakens campaign lands while over 100 U.S. crypto firms are urging the Senate Banking Committee to move forward on the Clarity Act, a broader digital-asset market structure bill that includes tax and reporting themes.1
Lawmakers have also floated de minimis ideas focused on payment stablecoins and high-volume networks, but these are proposals, not enacted rules. Key signals to watch are: any de minimis language added to tax or crypto bills, hearings that specifically mention small-transaction relief, and whether staking-tax treatment appears in draft legislative text.
For now, U.S. users must still treat virtually every disposal and staking reward as taxable, and any practical relief will depend on if and how Congress folds these ideas into upcoming bills.
Conclusion
Kraken is using hard data on millions of tiny, reportable crypto transactions to argue that current U.S. tax rules are misaligned with everyday usage and staking. The potential upside is lower friction for paying with crypto and simpler staking taxes, but until Congress acts, these remain advocacy goals, not operational changes users can rely on.
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