Coinbase urges Supreme Court to weigh in over IRS's access to customer data

Coinbase urged the U.S. Supreme Court to consider a case involving the Internal Revenue Service that it says "sets a dangerous precedent" surrounding customers' personal data.

The crypto exchange said the Supreme Court should clarify the third-party doctrine, which says that people who give information to third parties, such as banks, should not have an expectation of privacy.

"This Court’s guidance is especially important here because this case involves a new technology—blockchain— that is particularly susceptible to surveillance abuse," the firm said in an amicus brief filed on Wednesday with the Supreme Court.

The IRS demanded records from Coinbase almost a decade ago from thousands of its customers, including information involving security settings, transactions, and correspondence. The company pushed back, but a district court later said Coinbase had to comply, but narrowed the IRS's search according to the filing.

In 2020, petitioner James Harper, a Coinbase customer, filed a suit against the IRS for its role in the alleged unlawful seizure of information that identified him as a crypto holder.

Now it's up to the Supreme Court to decide if it wants to take Harper's case up. Others have filed amicus briefs, including billionaire Elon Musk, the Cato Institute, and the DeFi Education Fund.

Coinbase Chief Legal Officer Paul Grewal said the company supports complying with tax rules, but said the IRS went too far.

"We believe in tax compliance, but this goes far beyond a narrow and tailored request and far beyond crypto," Grewal said Wednesday in a post on X. "This applies to banks, phone companies, ISPs, email, you name it. As we explain here, you should have the same right to privacy for your inbox or account as you have for a letter in your mailbox."