The Federal court rules for IRS after filing petition 2 weeks ago. US court orders Coinbase to surrender users’ data. Will the Coinbase reveal the information about its clients?
2 December, AtoZForex – After knowing the US government is searching for all the information Coinbase collected from clients, court rules in favor of IRS’ demands. The US Court orders Coinbase on Wednesday 30 November that Bitcoin must surrender its user data to the IRS.
US Court orders Coinbase to surrender users’ data
Less than two weeks ago, the American tax agency Internal Revenue Service (IRS) has filed a petition in the Federal court seeking information of all records of Coinbase customers. On Wednesday, the court ruled in IRS’ demands favor. Thus, the US court orders Coinbase to surrender its user data for 2013 until 2015 to the American tax agency IRS.
Although the court judged to IRS’ favor, Coinbase is not expected to obey the orders anytime soon. Coinbase promised its clients that it would fight for their privacy rights and still, there are higher appeals procedures in the American justice system. These appeals may turn things around, thus it’s not anticipated that Coinbase will follow the orders.
Users might want their data to remain confidential
In case Coinbase will have to eventually transfer user data to the IRS, people might still want their data private. Hence, users interested in keeping their financial affairs private will probably try to avoid American exchanges and other Bitcoin service provider. IRS took this step only after they found out about three cases where people illegally tried to dodge paying taxes by cryptocurrencies. Also, only two of these three cases were Coinbase clients.
Moreover, last week, an experienced cryptocurrency expert said that the IRS needs to update tax guidelines. This is due to the fact that cryptocurrency users can report gains and losses. Also, computer engineer and CEO of Node40, Perry Woodin, stated that problems with the current system led users to appear under investigation.
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