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Coinbase Leaps Into Supreme Court Case in Defense of User Data Going to IRS
The U.S. crypto exchange filed a brief in a longstanding privacy battle over records the tax agency sought on customers' crypto transactions.
What to know:
- U.S. crypto exchange Coinbase made an argument in a U.S. Supreme Court privacy case based in an original 2016 request from the Internal Revenue Service for customers' transaction records.
- The company says the government overreached when seeking data on hundreds of thousands of users, and it argues the matter has wider privacy implications.
In this article
Coinbase (COIN) filed a brief in the U.S. Supreme Court case involving an Internal Revenue Service request for data on hundreds of thousands of its customers back in 2016, arguing the court should "protect Americans' privacy interests in digital information stored by third-party service providers."
The U.S. tax agency — in an action during the first administration of President Donald Trump — had been seeking financial records under the stance that the individuals's transaction records should be made available once they'd shared their information with a third party. In this instance, that party was Coinbase. The exchange fought to narrow the request through court battles and eventually was compelled to deliver a much narrower scope of data.
STORY CONTINUES BELOW
"The court should intervene to clarify that the third-party doctrine does not allow the IRS to conduct dragnet searches," Coinbase contended in its amicus brief filed on Wednesday in the case that has wide privacy implications.
In 2020, one of the customers, James Harper, a Bitcoin
researcher, filed a lawsuit against the IRS, accusing it of improper overreach in its demand for records. Years later, Harper — a lawyer and fellow and the American Enterprise Institute — has his argument before the high court."User anonymity vanishes — and the blockchain becomes susceptible to easy surveillance — when the government acquires information that allows it to match a public key or wallet address to a user’s identity," Coinbase noted.
"This John Doe summons invaded a sphere in which over 14,000 Americans had a reasonable expectation of privacy against a warrantless IRS trawl for extensive personal and financial information," the company argued.
Representing the government's case, the Department of Justice had previously argued that "a person lacks a reasonable expectation of privacy in information voluntarily provided to a third party, including bank records pertaining to him."
Read More: How a Lawsuit Against the IRS Is Trying to Expand Privacy for Crypto Users
Jesse Hamilton
Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.
More For You
Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
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