Coinbase challenges IRS crypto data collection before Supreme Court

Coinbase filed an amicus brief with the US Supreme Court on April 30, challenging the IRS's broad collection of cryptocurrency user data. The company argues that the IRS's actions violate Fourth Amendment protections. The filing supports James Harper's constitutional challenge to the IRS's John Doe summons, which compelled the disclosure of financial and identity records for over 14,000 Coinbase customers without individualized suspicion. Coinbase had previously resisted a 2016 IRS summons seeking data on approximately 500,000 users. After a court order, Coinbase complied, providing data on a subset of users linked to 8.9 million transactions over three years. Coinbase argues this allows unchecked surveillance of users' crypto transactions, connecting pseudonymous blockchain wallet addresses to real-world identities. In 2024, Coinbase received 10,707 requests from law enforcement and federal agencies, mostly from the US. Coinbase seeks to narrow overly broad requests, protecting customer details. The company argues the IRS's action is an overreach, potentially allowing the agency to "target anybody" and "rummage through" user data, undermining the privacy of crypto transactions.