Circle Informs Clients about IRS Summons on User Transactions
Crypto company Circle has been reaching out to its U.S. clients through email to inform them about its decision to comply with a summons from the IRS. The summons, which was issued on April 9, 2021, targets Circle and its subsidiaries. According to the email, the IRS is requesting data on clients who have made transactions of $20,000 or more in any year from 2016 to 2020. Circle used to offer bitcoin to retail customers and briefly owned Poloniex but has since discontinued both operations.
Circle’s Pledge to Comply with the Summon
In the email to clients, Circle stated that it is informing them about its plans to comply with the IRS summons. The company acknowledges the summons’ requirement to produce specific information about the clients’ accounts. Circle advises clients who have concerns about the situation to seek legal advice from an attorney.
Similar Situations with Kraken and Coinbase
Circle’s announcement follows a similar incident involving Kraken, where the IRS issued a summons to the San Francisco-based crypto exchange for details on customers with yearly trading volumes exceeding $20,000 from 2016 to 2020. Coinbase, another San Francisco platform, was also mandated by the IRS in 2018 to provide customer information. The issue regarding the summons is still unresolved for Circle, as per their communication to clients, who are advised to consult tax professionals if they believe they have a tax obligation.
Hot Take: Circle Complies with IRS Summons, Raises Concerns for Crypto Users
Circle’s decision to comply with the IRS summons raises concerns among crypto users about the privacy and confidentiality of their transactions. While the IRS aims to collect data on individuals who have engaged in large-scale transactions, this move puts pressure on crypto companies and their clients. It highlights the need for individuals involved in crypto trading to understand their tax obligations and seek guidance from legal and tax professionals to ensure compliance and protect their interests in this evolving regulatory landscape.
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