Coinbase user files to block IRS from accessing bitcoin users’ info

Regulation | December 16, 2016 By:

A user of Coinbase cryptocurrency exchange has filed a motion in federal court seeking to block the Internal Revenue Service (IRS) from accessing personal and transactional information of individuals who used the Coinbase’s platform during 2013-2015.

According to new filings dated 13th December, Los Angeles-based lawyer Jeffrey Berns has disputed the legitimacy of the IRS effort to obtain three years’ worth of user records. The IRS pursuit of a ‘John Doe’ summons, begun last month, was approved by US Judge Jacqueline Scott Corley on 30th November.

Berns wants the IRS stopped, the motion says: “on the grounds that the IRS has no legitimate purpose in seeking the requested documents from Coinbase concerning its users, enforcement of the IRS Summons would constitute an abuse of process as the IRS does not currently have the ability to enforce compliance with its 2014 virtual currency guidance, and the categories of requested documents are so overbroad such that the IRS Summons would require the disclosure of a substantial amount of information and documents that are not relevant to the IRS’s stated purpose in issuing the IRS Summons.”

The customer data sought by the IRS includes the identification of Coinbase’s U.S. customers and substantial private security and financial information for those customers. Berns estimates that over a million Americans are subject to the IRS summons.