Coinbase files brief with US Supreme Court in support of taxpayers' privacy

US-based cryptocurrency exchange Coinbase has filed an amicus brief in the country’s Supreme Court in support of a taxpayer fighting the Internal Revenue Service (IRS) gaining access to his data from a digital asset platform.

In an April 30 filing in the Supreme Court of the United States (SCOTUS), lawyers for Coinbase argued that a First Circuit Court of Appeals decision set a “dangerous precedent” for crypto users, potentially allowing the government to “trace users’ every crypto transaction in the past and monitor every crypto transaction in the future.”

The appeal to the Supreme Court stemmed from petitioner James Harper, a Coinbase user, who took legal action against the IRS after the crypto exchange was forced to turn over transaction data to the government using a sweeping “John Doe” summons in 2017.

“This case directly affects Coinbase’s interest in protecting the privacy rights of its users and in the correct application of this Court’s doctrine on constitutional guarantees against warrantless government demands for third-party service providers to surrender users’ personal information,” the brief reads.

“If the First Circuit’s ruling is allowed to stand, the Fourth Amendment will give no protection to millions of law-abiding Americans who routinely share intimate personal information with the third parties that ubiquitously store, transmit, or provide services based on that data,” it added.

An amicus brief is a filing in support of a plaintiff by an entity that is not directly involved. The case before the court has the potential to set significant precedents for digital privacy rights for crypto users and how the IRS will be allowed to gather data on taxpayers. Both the US District Court for the District of New Hampshire and the First Circuit have ruled against Harper’s petition, leaving the Supreme Court as his last option for an appeal.

Related: IRS crypto tax reporting rules threat to industry — Coinbase legal chief

“We believe in tax compliance, but this goes far beyond a narrow and tailored request and far beyond crypto,” said Coinbase chief legal officer Paul Grewal, in an April 30 X post. “This applies to banks, phone companies, ISPs, email, you name it [...] you should have the same right to privacy for your inbox or account as you have for a letter in your mailbox. “

It’s unclear whether the court will take up the case. SCOTUS typically releases its opinions to the public in June. Since first being filed in 2020, many industry advocates have filed similar amicus briefs in support of Harper, including social media company X and the DeFi Education Fund.

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