United States Court Orders Coinbase to Release Data of 14,000 Users to the IRS
Coinbase director of communications, David Farmer revealed in a November 29th blog post that Coinbase won a “partial victory” in their month-long court battle against the Internal Revenue Service. But this partial victory still means relinquishing data on 14,000 active accounts.
The courtroom drama dates back to November of last year, when the IRS originally requested account details of more 480,000 individuals. The sought-after information included such specifics as name, address, taxpayer ID, and transaction amounts.
After initial court proceedings, the IRS agreed to narrow the scope of the inquiry. They opted to limit their request to users who transacted $20,000 or more from 2013-2015. Coinbase argued that the breadth of the search was still too sweeping, and back in July, the popular exchange filed another opposition case.
The dust has finally settled in what has become a year-long battle, but Coinbase didn’t walk away completely untouched. In a formal California court order, the United States District Court of Northern California has ordered Coinbase to relinquish the name, address, taxpayer ID, and date of birth of roughly 14,000 accounts.
Coinbase ultimately failed to reduce the overall yield of the search, as the 14,000 affected individuals have transacted $20,000 or more worth of cryptocurrencies within the 2013-2015 period. They did, however, succeed in reducing the amount and type of data the IRS will seize. The court denied the disclosure of certain information requested in the original order, such as wallet addresses and public keys.
Crypto advocacy groups have come out in defense of Coinbase and their relative victory. The crypto advocacy and legal research group, Coin Centre, for instance, lambasted the IRS for its “lack of jurisdiction” in these matters. They believe that the ruling “sets a bad precedent for financial privacy” and “is a perfect example of why clarity in the tax treatment of cryptocurrencies is needed.”
Coinbase plans to notify any users who will be affected by the court order.
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