Coinbase Files Amicus Brief with the U.S Supreme Court Against IRS Data Access

Key Highlights:

• Coinbase challenges the “Third Party Doctrine” eliminating privacy expectations from users. 

• The Crypto exchange files amicus brief with the Supreme challenging IRS Data access. 

Coinbase files an amicus brief with the Supreme Cout challenging the IRS's actions to collect customer data without the need for a legal warrant.

In its filing, Coinbase posited that the IRS's actions go against the right to privacy. In the authority's activities, it has invaded a sphere violating the rights of over 14k Americans who have legal authority against a warrantless search of personal data.

According to Coinbase, these actions by the IRS are discriminatory against blockchain users since every other person in the United States is entitled to a warrant before a search. In context, in 2017, the U.S. Supreme Court issued a John Doe Summons to Coinbase.

The top court asked the Crypto exchange platform to provide data for 500k users. During that time, the government requested the information as they attempted to ensure crypto users were compliant and properly reported on taxes and other financial activities.

Since then Coinbase and the courts have engaged in a fierce battle with Coinbase's legal team describing the authorization as a fishing expedition. In his submission, Coinbase Chief Legal Officer Paul Grewal argued that: 

 " 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."

Coinbase Pushes Back on IRS Overreach

Coinbase is attempting to draw a legal line not only for Crypto but for digital privacy as a whole. In this regard, the Crypto Exchange platform is challenging the U.S. government's dependence on the third-party doctrine.

According to the argument, the legal precedent is outdated as digital space expands. The U.S. Department of Justice has over the years used an old legal principle to justify sweeping data requests from digital platforms.

The third-party doctrine posits that when an individual willingly shares information with a third party, they defer any expectations of privacy. Using this basis, the IRS has demanded access to user data from crypto firms without individual consent.

Therefore, Coinbase sees the need for the Supreme Court to step in to protect digital privacy for everyone without discrimination. The firm argues that it is not about tax evasion but opposes the idea that authorities can collect customer data without legal limitations.

This push is partially motivated by the recent ruling overturning sanctions on Tornado Cash. In conclusion, the Coinbase move is essential as it stands for digital rights in an age where state surveillance is becoming a norm.

The outcome of this legal battle shapes and defines how user data is treated across the digital space. Inasmuch so, most crypto users and firms would need protection especially as the U.S. aims to build a crypto-centric future.