orxcash

US Government Urges Supreme Court Not to Hear Coinbase User’s Challenge Against IRS

The US government has filed a motion with the Supreme Court, urging it not to take up a case brought by a Bitcoin (BTC) investor who is challenging the Internal Revenue Service’s (IRS) efforts to obtain his crypto transaction records from Coinbase. The move is the latest development in an ongoing battle between the IRS and cryptocurrency users over the agency’s access to their financial information.

Coinbase User Sues IRS Over Crypto Records Search

The case centers on James Harper, a Coinbase user who traded Bitcoin (BTC) on the platform during the relevant years. Harper sued the IRS, claiming that the agency’s actions constituted an unconstitutional search of his personal records. However, lower courts have disagreed, ruling that Coinbase’s records are business documents, not Harper’s private papers, and that the IRS acted lawfully in obtaining them.

Government Argues No Expectation of Privacy

In its brief, the government argued that Supreme Court precedent supports the IRS’s position. Citing past cases such as United States v. Miller, the government emphasized that individuals have no reasonable expectation of privacy in financial records held by third parties, such as Coinbase. The filing also pointed to Coinbase’s own privacy policy, which warns users that their information may be shared with law enforcement.

Coinbase Data Breach Exposes User Information

Meanwhile, Coinbase has been dealing with the aftermath of a major data breach, which was disclosed on May 15. Attackers bribed customer support staff in India to access sensitive user information, including customer names, account balances, and transaction histories. The breach impacted roughly 1% of Coinbase’s monthly transacting users, including venture capitalist Roelof Botha, managing partner at Sequoia Capital.

Lawsuits Mount Against Coinbase

Coinbase has faced a wave of lawsuits following the breach, with at least six legal complaints filed on May 15 and 16. Plaintiffs accuse the exchange of failing to implement adequate security measures and mishandling its response to the breach. The incident has raised concerns about the security of cryptocurrency exchanges and the protection of user data.

The Supreme Court has not yet decided whether it will hear the case. A denial would leave in place the First Circuit’s ruling in favor of the IRS, potentially setting a precedent for future cases involving cryptocurrency users and their financial records. As the crypto industry continues to evolve, the outcome of this case could have significant implications for the balance between user privacy and government access to financial information.

#government #urges #court #reject #Coinbase #users #crypto #records #fight #OrxCash