- Coinbase files an amicus brief in the U.S. Supreme Court to challenge IRS data collection.
- The company argues the IRS’s mass data requests violate Fourth Amendment privacy rights.
- Coinbase urges the Supreme Court to limit government access to crypto data without suspicion.
Coinbase submitted an amicus brief to the U.S. Supreme Court to back a constitutional lawsuit against the Internal Revenue Service (IRS). An amicus brief presented on April 30 establishes that the Fourth Amendment protects privacy areas that the Internal Revenue Service violated through extensive data acquisition. The 2016 IRS summons required Coinbase to submit extensive financial records from over 14,000 users to the federal authorities.
Source: X
The initial IRS summons requested data from over 500,000 Coinbase customers. A federal court required Coinbase to cooperate after the company initially resisted protecting user information. The IRS requested financial transaction records, which resulted in the collection of information about 8.9 million transactions spanning multiple years. The widespread collection of user data by Coinbase violates constitutional boundaries and poses risks to the privacy protection of all Crypto customers.
In Coinbase’s stance, the IRS performs excessive surveillance through its method of linking blockchain wallet addresses to real-world user identities. According to the company’s view, the IRS’s surveillance capability, which enables unrestricted monitoring of cryptocurrency transactions, compromises user privacy. Coinbase asserts that continuous invasive monitoring through these practices opposes users’ rights under the constitution.
Grewal’s Stance on IRS Methods
Paul Grewal, as Coinbase’s Chief Legal Officer, revealed his critical stance against the IRS method for crypto user privacy.. Grewal explained that under the “third-party doctrine” governments can access data exchanged between users and their bank or phone company partners. He emphasised that the third-party doctrine has not kept pace with modern digital realities, particularly when it comes to handling crypto transaction records.
Related: Oregon Sues Coinbase Over Unregistered Securities Sales
Grewal declared that Coinbase supports tax compliance, yet the company strongly resists IRS-wide data requests within cryptocurrency. Coinbase’s legal fight aims to defend consumer privacy, which he said is distinct from the process of genuine tax collection. According to the company, the IRS exceeded its authority by seeking broad-scale data without exhibiting reasonable cause for suspicion.
The legal argument in Coinbase’s court document references Carpenter v. United States, a Supreme Court case. United States decision. The Supreme Court established a requirement for government agencies to obtain warrants before tracking cell phone location information. Coinbase seeks digital financial protection at the same level as analogue financial information by advocating contemporary privacy safeguards.
Coinbase responds that it handles a substantial number of governmental data inquiries annually, with many of these requests originating from U.S. authorities. The company supports official requests for information, but makes it clear that any such requests must be specifically focused. The company works toward obtaining legal protocols that safeguard privacy rights while permitting governmental investigation activities.
Coinbase requests that the Supreme Court establish strong privacy boundaries to limit government digital data interceptions. According to Coinbase users’ data exposure could become limitless after the IRS exceeds its legal authority because this precedent would let government agencies access personal information without warrants or reasonable suspicion.
