Coinbase, a leading cryptocurrency exchange, has taken a stand against the Internal Revenue Service’s (IRS) broad collection of cryptocurrency user data. In a recent amicus brief filed with the US Supreme Court, Coinbase supported a constitutional challenge to the IRS’s actions, arguing that they violate Fourth Amendment protections.
The filing, submitted on April 30, focused on an IRS John Doe summons that required Coinbase to disclose detailed financial and identity records for over 14,000 customers without individualized suspicion. The company’s opposition to the summons stems from concerns about user privacy and the implications of allowing unchecked surveillance of crypto transactions.
The case is centered around petitioner James Harper, whose financial data was obtained by the IRS through a 2016 summons to Coinbase that sought information on approximately 500,000 users. Coinbase initially resisted the request but ultimately complied after a court order mandated the production of data on a smaller subset of users linked to 8.9 million transactions over a three-year period.
Coinbase’s chief legal officer, Paul Grewal, emphasized the importance of challenging the third-party doctrine, which states that individuals forfeit their expectation of privacy when sharing information with third parties. Grewal argued that this doctrine allows for overreach and highlighted the need for privacy protections in the digital age.
In a December report, Coinbase revealed that it had received over 10,000 requests from law enforcement and federal agencies in 2024, with a focus on narrowing broad requests to protect customer data. The company reiterated its commitment to cooperating with lawful government requests but drew the line at bulk data collection without cause.
The amicus brief detailed Coinbase’s legal efforts to block the summons, its refusal to comply voluntarily, and the arguments made during enforcement proceedings. The company raised concerns about the IRS’s ability to link blockchain wallet addresses to real-world identities, compromising the privacy of pseudonymous crypto transactions.
Coinbase called on the Supreme Court to uphold limitations on government access to sensitive personal and financial data from crypto service providers. The company warned that failing to address these concerns could set a dangerous precedent for unchecked government surveillance of digital platforms.
In conclusion, Coinbase urged the Supreme Court to clarify that bulk acquisition of user data must adhere to constitutional standards. The company’s stance underscores the importance of protecting user privacy in an increasingly digital world.