Coinbase challenges IRS access to customer data, takes case to US Supreme Court

• Coinbase Challenges IRS Over Customer Data in Court
• Supreme Court May Redefine Privacy in Cryptocurrencies
• IRS Oversteps Its Limits in Demanding Coinbase Records

Coinbase, a leading cryptocurrency exchange in the United States, has asked the country's Supreme Court to review a case involving the Internal Revenue Service (IRS), arguing that the lawsuit could set dangerous precedents regarding user data privacy.

The request was made through an amicus curiae brief filed by the company last Wednesday. In the document, Coinbase questions the validity of the so-called “third-party doctrine,” which holds that citizens have no right to privacy over data handed over to institutions such as banks or service providers.

“This Court’s guidance is especially important here because this case involves a new technology — blockchain — that is particularly susceptible to surveillance abuse,” the company wrote in the brief to the Supreme Court.

The dispute began nearly a decade ago, when the IRS requested detailed records from Coinbase on thousands of customers, including transaction details, security measures and messaging. Despite initial resistance, the company was eventually forced to provide some of the information after a court ruling limited the scope of the tax agency’s request.

The case gained even more attention in 2020, when Coinbase customer James Harper filed a lawsuit against the IRS alleging that the government had illegally obtained his personal data linked to his cryptocurrency use.

The Supreme Court is currently considering whether to hear the case. The lawsuit has received support from several entities and public figures, including Elon Musk, the Cato Institute and the DeFi Education Fund, who have also filed legal briefs arguing for a review of the data collection practice.

Paul Grewal, Coinbase’s chief legal officer, stressed that the company supports tax compliance but considers the IRS’s approach to be excessive. “We believe in tax compliance, but this goes far beyond a specific, personalized request, and far beyond cryptocurrencies,” Grewal said in a post on X. He compared the situation to authorities accessing emails and phone carrier data, defending users’ right to privacy.