tl;dr
Coinbase filed an amicus brief with the US Supreme Court challenging the IRS's broad collection of cryptocurrency user data, arguing it violates Fourth Amendment privacy protections. The IRS issued a 2016 John Doe summons demanding detailed financial and identity records for over 14,000 Coinbase cus...
Coinbase has filed an amicus brief with the US Supreme Court challenging the IRS’s broad collection of cryptocurrency user data, arguing it violates Fourth Amendment privacy rights.
The dispute centers on a 2016 IRS John Doe summons demanding detailed financial and identity information for more than 14,000 Coinbase customers without individualized suspicion. While Coinbase initially resisted, it complied only after a federal court limited the scope to a smaller subset linked to 8.9 million transactions over three years.
Coinbase contends that the IRS’s ability to connect blockchain wallet addresses to real-world identities enables unchecked, continuous surveillance of crypto users, undermining the privacy model of pseudonymous transactions.
Paul Grewal, Coinbase’s chief legal officer, criticized the application of the third-party doctrine, which currently assumes no reasonable expectation of privacy when information is shared with third parties. He advocates for updating legal interpretations so that digital communications and accounts receive the same privacy protections as physical mail.
The company supports tax compliance but opposes the bulk data collection approach without cause. Coinbase highlights that the IRS’s sweeping data acquisition yields sensitive details such as names, taxpayer IDs, transaction logs, and counterparty data, raising concerns about potential government overreach.
Arguing that this extensive surveillance surpasses historical precedents, Coinbase calls on the Supreme Court to reaffirm and extend limits similar to those established in Carpenter v. United States, which addressed warrantless access to mobile phone location data.
Ultimately, Coinbase urges the Supreme Court to block the IRS’s broad crypto data grab to preserve constitutional privacy, insisting that bulk acquisition of sensitive personal and financial information from cryptocurrency platforms must require warrants and adhere to Fourth Amendment protections in the digital age.