• A federal court ruled that the IRS has the legal authority to access Coinbase users’ trading data via a “John Doe” summons.
• The ruling was made in a case filed by James Harper against the IRS in 2020, which sought to block the tax authority’s access by arguing that it was a violation of Harper’s Fourth and Fifth Amendment rights.
• The U.S. District Court of New Hampshire said the powers afforded to the IRS by Congress allow it to access any information knowingly shared with a third party and thus, Harper is not entitled to any protections as he did not have “a reasonable expectation of privacy in Coinbase’s records of his account.”
IRS Has Legal Authority To Access Coinbase Users‘ Trading Data
A federal court has ruled that the Internal Revenue Service (IRS) is within its legal rights to access Coinbase users‘ trading data via a „John Doe“ summons.
Case Filed By James Harper Against The IRS In 2020
The ruling was made in response to a case filed by James Harper against the IRS in 2020. He sought to block their access on grounds that it violated his Fourth and Fifth Amendment rights.
Power Afforded To The IRS By Congress Allows It To Access Any Information
The U.S. District Court of New Hampshire stated that powers granted to the IRS through Congress allow them to access any information knowingly shared with third parties.
„Reasonable Expectation Of Privacy“ Does Not Apply In This Case
The court further clarified that due to this, Harper is not entitled for any protections as he does not have „a reasonable expectation of privacy in Coinbase’s records“.
„Financial Records At A Bank“ Cannot Be Protected Under Constitutional Rights
Additionally, they mentioned that trading records at Coinbase are akin to financial records at a bank and cannot be protected under constitutional rights.