- The U.S. government advised the Supreme Court not to hear a challenge against the Internal Revenue Service (IRS) regarding access to Coinbase user crypto records.
- The Solicitor General argued that users have no Fourth Amendment right to financial data stored on third-party platforms like Coinbase.
- The dispute began after the IRS used a “John Doe” summons in 2016 to collect records from Coinbase users with high-volume transactions.
- Lower courts have ruled against the user, stating that such records are business documents, not private papers.
- Coinbase disclosed a data breach in May 2025 that exposed sensitive information of about 1% of its active users, leading to multiple lawsuits.
The U.S. government has requested that the Supreme Court decline to hear a case brought by a Coinbase user who disputed the IRS’s attempt to access his cryptocurrency transaction records. In a May 30 filing, Solicitor General D. John Sauer argued that James Harper, the Coinbase user, has no constitutional protection to keep these records private from government inquiry.
The government stated that Harper shared his personal data with Coinbase by choice, and the IRS followed appropriate legal channels, including a judicially approved summons, to obtain the information. The IRS investigation, starting in 2016, sought to address significant underreporting of crypto-related tax gains by requesting detailed records from Coinbase for customers engaging in large transaction volumes.
Harper claimed this action amounted to an unconstitutional search of his private information, but lower courts sided with the IRS. They determined the records in question were considered business documents, not personal papers, and referenced Supreme Court precedents like United States v. Miller to support this view. The government highlighted that Coinbase’s privacy policy had warned users that their data might be shared with authorities if required by law.
According to the government’s court filing, “To the extent petitioner made those arguments below, the court of appeals correctly rejected them as both foreclosed by this Court’s precedent and meritless.” The Supreme Court has not made a decision on whether it will review the case. If it declines, the First Circuit’s ruling in favor of the IRS will remain in effect.
In separate developments, Coinbase revealed a data breach on May 15, 2025, in which attackers bribed support staff in India and gained access to the names, account balances, and transaction histories of about 1% of monthly transacting users. The breach included high-profile individuals and led to at least six lawsuits alleging failure to provide adequate security measures and an improper response to the incident.
For more on official filings, see the Supreme Court document. Further background on the breach can be found in related coverage: Coinbase data breach 2025: What was stolen and what you need to know.
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