Bad news for Coinbase users who’ve received over $20,000 to their accounts in a year — a federal court has ordered the exchange to hand over all their records to the IRS. Over 14,300 users will be affected. On the other hand, it’s 97 percent less information than the IRS actually wanted.
Mixed Fortunes in Court for Coinbase and Bitcoin Traders
The Verge reported Coinbase will be forced to supply the users’ names, birth dates, addresses, and taxpayer IDs. The IRS will also get their Coinbase transaction histories and information on associated accounts.
However Coinbase’s David Farmer described the ruling as a “partial victory over the IRS”, noting the IRS was also forced to narrow the scope of its initial request. The government had initially asked for over 480,000 records for the years 2013-15.
That’s the entire records for all users. Coinbase described it as “government overreach”, especially since the IRS was casting a net over the entire user base without specific allegations of wrongdoing by individual users.
It also said the actual quantity of data for the 14,300+ affected users was less than the IRS wanted, with the court acknowledging privacy rights were at risk.
Coinbase: We Tried to Protect Our Users
Coinbase is trying to remind its customers that it did devote significant resources to fighting the order for over a year ago — and that the IRS is a tough adversary to challenge.
“The government’s own lawyers noted at the hearing that the IRS is not accustomed to having to fight for records in this context, and most companies just turn records over without going to court.”
Even though less than one percent of Coinbase’s user base is affected, 14,300 is still a lot of people — and it’s likely the company’s most lucrative segment. The company is determined to show the disclosure the government’s doing and not its own wishes, should they be subject to PayPal-like criticisms as a result.
Coinbase said it’s in the process of reviewing the orders, and will keep customers updated and notified in advance if their information is about to be disclosed.
Are you one of the affected Coinbase users? What’s your take on this whole process? Let’s hear your thoughts.
Images via Coinbase, Pixabay