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Coinbase May Counteract IRS Subpoenas

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Coinbase May Counteract IRS Subpoenas

Coinbase the largest Bitcoin exchange firm in the U.S. is likely to obstruct subpoenas from the Internal Revenue Services (IRS) seeking the data of all consumers who bought digital currency from the company from 2013 to 2015.  Coinbase, recognized it had received a subpoena sent by the IRS asking for information on its consumers.  Chris Padovano, a lawyer and the founder of Decentralized Legal, said “expects Coinbase to revert the government’s suit.  It’s very likely, considering their customer base and the philosophical base of most of their users, that Coinbase will challenge this summons”.

Padovano does not speak for Coinbase, but does work with blockchain technology research firm CoinFund.  Answering to the IRS’s subpoena, which was reported by the New York Times and financial blog ZeroHedge, Coinbase noted concerns with the extensive nature of the government’s suit.  Juan Suarez, an attorney for Coinbase, said “we want to work with law enforcement that’s mainly our rule, the company’s head legal counsel but we can’t tolerate sweeping fishing expeditions. We are very concerned about the financial privacy rights of our consumers”.  The subpoena claims that an IRS agent newly found three cases involving Bitcoin consumers who used the digital currency to avoid taxes.  Two of those cases, the subpoenas claims, involved Coinbase consumers.  Also, the I.R.S. stated that it knows that Coinbase consumers have not gave in with federal law in the past.  While the case is likely more nuanced, the government may have overreached with its request to gain access to all of Coinbase’s users based on the actions of two, Padovano said. Still, he’s unsure whether there could be a case for the IRS to demand that Coinbase release at least some of its consumers’ report.

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