CryptoNews

Coinbase Fights IRS at Supreme Court Over 500K User Data Demand

Coinbase is taking its fight for digital privacy to the highest court, urging the Supreme Court to dismantle mass surveillance powers threatening the future of crypto freedom.

Coinbase Asks Supreme Court to Strike Down Digital Dragnet in Crypto Crackdown

Crypto exchange Coinbase (Nasdaq: COIN) revealed on April 30 that it had filed an amicus brief with the U.S. Supreme Court, urging the justices to take up Harper v. O’Donnell, a case challenging the Internal Revenue Service’s mass data collection from the cryptocurrency platform.

“The history of this case began when the Internal Revenue Service served Coinbase with a sweeping John Doe summons to produce personal and financial data for over 500,000 customers involved in millions of transactions across three full years,” Coinbase detailed. The brief argues that the agency’s use of a John Doe summons violates Fourth Amendment protections and abuses the third-party doctrine, a controversial legal theory permitting the government to access data held by third-party service providers without a warrant.

“The third-party doctrine says that any time you voluntarily share info with a third party you have no reasonable expectation of privacy whatsoever,” Coinbase’s chief legal officer, Paul Grewal, stated on social media platform X, adding:

Today Coinbase filed an amicus brief with the U.S. Supreme Court to right this wrong.

The Coinbase legal chief highlighted its resistance to the IRS’ sweeping demands during the original enforcement process in 2017. “We know how painful the overreach of the doctrine can be. In 2017 the IRS asked for the financial data of more than 500K Coinbase customers. We vigorously pushed back against this government overreach on behalf of our customers, and the IRS substantially narrowed it. But too often this type of fishing expedition is allowed by the courts,” he detailed.

Coinbase’s brief warns that the First Circuit Court’s decision effectively endorses indefinite surveillance of blockchain activity. Once authorities match a user’s identity with a wallet address, they can track every past and future transaction on the blockchain—raising severe concerns for digital privacy. The company contended that such expansive access to user information is not just a cryptocurrency issue. Grewal noted:

We believe in tax compliance, but this goes far beyond a narrow and tailored request and far beyond crypto. This applies to banks, phone companies, ISPs, email, you name it.

“As we explain here, you should have the same right to privacy for your inbox or account as you have for a letter in your mailbox,” he continued.

Coinbase cited the Supreme Court’s 2018 decision in Carpenter v. United States to argue that outdated precedents from the 1970s do not justify modern surveillance enabled by digital platforms. The brief calls for the Court to restore meaningful limits on government access to personal data in the digital era, emphasizing that unchecked use of the third-party doctrine could erase privacy expectations across online services.

Source: Bitcoin

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