01.07.2025 01:52

The U.S. Supreme Court's refusal to hear an appeal from a Coinbase user, James Harper, has handed a significant victory to the Internal Revenue Service (IRS). This decision, announced on Monday, June 30th, allows the IRS to access data from over 14,000 Coinbase users without the need for individual warrants. The Court's silence on the matter, a typical occurrence in such cases, provides no further clarification or limitations on the IRS’s data collection methods.

Harper's legal challenge stemmed from a 2016 IRS summons demanding data on all Coinbase users potentially involved in unreported cryptocurrency income. He argued that this broad request constituted an unreasonable search and seizure, violating his Fourth Amendment rights. However, lower courts rejected his claims, invoking the “third-party doctrine,” which posits that individuals lack a reasonable expectation of privacy when sharing data with third-party services. The Supreme Court's inaction effectively upholds these lower court rulings.

This Supreme Court decision leaves Harper without further legal recourse, solidifying the IRS's power to obtain user information from centralized cryptocurrency exchanges without individualized warrants. The implications of this ruling are far-reaching, extending beyond the cryptocurrency industry. Legal analysts express concern that this precedent could embolden government agencies to expand surveillance powers across various financial and technological platforms, potentially leading to widespread erosion of user privacy. This broad access to user data raises considerable questions about the balance between national security interests and individual privacy rights in the digital age. The absence of any Supreme Court explanation further emphasizes the potential for unchecked governmental overreach in the collection of user data from private companies.