A legal battle for digital privacy is being brought to the highest court by Coinbase, with an appeal made to the Supreme Court for the dismantling of broad surveillance powers that are viewed as a threat to the future of cryptocurrency freedom.
Crypto exchange Coinbase (Nasdaq: COIN) disclosed on April 30 that it submitted an amicus brief to the U.S. Supreme Court to urge the justices to consider the case of Harper v. O’Donnell, which contests the Internal Revenue Service’s large-scale data gathering from the cryptocurrency platform.
Coinbase explained that the case originated from the Internal Revenue Service issuing a broad John Doe summons, which demanded personal and financial records of over 500,000 users who had carried out millions of transactions over three years. The amicus brief contends that the deployment of such a summons infringes upon Fourth Amendment rights and constitutes a misuse of the third-party doctrine—a disputed legal principle that allows government access to data stored by external service providers without the need for a warrant.
Coinbase Urges Supreme Court to End Broad Digital Surveillance in Crypto Probe
Coinbase’s chief legal officer, Paul Grewal, stated on the social media platform X that, under the third-party doctrine, individuals retain no reasonable expectation of privacy when they voluntarily share information with an external party.
Today Coinbase filed an amicus brief with the U.S. Supreme Court to right this wrong.
He further remarked:
Coinbase’s chief legal officer emphasized that the company strongly opposed the IRS’s broad data request during the initial 2017 enforcement action. The IRS had sought financial records of over 500,000 Coinbase users, prompting the firm to push back on behalf of its customers. As a result, the agency significantly reduced the scope of its request. However, he also pointed out that courts too often allow such expansive data collection efforts, often described as fishing expeditions.
Coinbase cautioned in its brief that the First Circuit Court’s ruling effectively endorsed perpetual surveillance of blockchain transactions. The company raised serious concerns about digital privacy, arguing that once authorities link a user’s identity to a wallet address, they can monitor all past and future activity on the blockchain. The company asserted that this broad level of access to personal data extends beyond just cryptocurrency matters. Additional remarks were made by Grewal, who stated:
We believe in tax compliance, but this goes far beyond a narrow and tailored request and far beyond crypto. This applies to banks, phone companies, ISPs, email, you name it.
He further stated that society should uphold the right to privacy for digital inboxes or accounts just as it protects the privacy of physical letters placed in mailboxes.
Coinbase referenced the Supreme Court’s 2018 ruling in Carpenter v. United States to assert that decades-old legal precedents from the 1970s are insufficient for addressing today’s surveillance capabilities through digital platforms. The legal brief urges the Court to reinstate strong limitations on governmental access to personal information in the digital age, warning that unrestricted reliance on the third-party doctrine could undermine privacy rights across internet-based services.
