After a lengthy court case, US Court approves IRS access to Coinbase Customer Data. Which accounts’ information will be revealed to the IRS? Does it signal the end of Bitcoin privacy?
30 November, AtoZForex – As we all know, digital currencies are not regulated by any governmental body, nor they are issued by any institution. However, in the light of the latest developments, it seems like the US authorities are finally getting a grip on the crypto market after all.
US Court approves IRS access to Coinbase Customer Data
This Wednesday, a federal judge in San Francisco has ruled out that one of the largest US cryptocurrency exchanges, Coinbase, must provide the IRS with identifying data on users. Yet, the exchange will need only to supply the info about the users with more than $20,000 annual transactions on its platform in the period between 2013 and 2015.
The officials have noted that the tax returns claiming gains from the cryptocurrency did not add up with the Bitcoin frenzy as an investment method. That is why the IRS ordered Coinbase to provide a range of information about its users.
Reportedly, Coinbase has refused to do so, and now the court has proposed a compromise. The official document from the court reads:
“Coinbase itself admits that the Narrowed Summons requests information regarding 8.9 million Coinbase transactions and 14,355 Coinbase account holders. That only 800 to 900 taxpayers reported gains related to bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains.”
IRS and Coinbase Find Compromise
Indeed, one of the key advantages of cryptocurrency trading is its decentralization and privacy. Therefore, the users were not happy with IRS request in regards to the Coinbase Customer Data. Nevertheless, Coinbase has managed to limit the government’s initial request for the data on all Coinbase users who implemented transactions from 2013 to 2015 to the smaller range of users.
In fact, the IRS initially requested nine sets of user data. These included “complete user profiles, know-your-customer due diligence, documents regarding third-party access, transaction logs, records of payments processed, correspondence between Coinbase and Coinbase users, account or invoice statements and records of payments.”
Yet, the exchange has opposed the request and as a result, the court has narrowed the scope of documents. Now, the IRS requests the taxpayer ID number, name, date of birth, address, transaction logs and account statements.
The court documents state that the request of data will only apply to the accounts that have bought, sold, sent or received more than $20,000 in any of those types of transactions between 2013 and 2015.
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