The U.S. Supreme Court has decided not to hear a landmark privacy case involving Coinbase and the Internal Revenue Service (IRS), effectively allowing the IRS to continue accessing cryptocurrency user data without violating the Fourth Amendment.
This decision upholds previous rulings that supported the IRS's broad authority to issue summonses to Coinbase seeking information on over 14,000 users as part of investigations into unreported crypto transactions. The legal challenge was initiated by James Harper, a Coinbase customer who argued that the IRS's 2016 data request violated his constitutional rights against unreasonable searches and seizures.
Despite Coinbase's support for Harper's appeal and advocacy from various technology companies emphasizing the need for updated digital privacy protections, the courts consistently reaffirmed the IRS’s authority under the third-party doctrine. This doctrine permits government agencies to access data held by third parties without a warrant.
The Supreme Court's refusal to take up the case leaves the existing legal framework intact and cements government powers to request private digital information from service providers like Coinbase. The ruling has broader implications beyond cryptocurrency, affecting privacy rights for all digital service users, including email and telecom customers.
Coinbase and privacy advocates had hoped for the Supreme Court to reconsider the decades-old third-party doctrine in light of modern technology, but the court declined without explanation. With this final ruling, Coinbase must comply with federal data requests within current legal boundaries.
