TechFlow news, May 31 — According to Cointelegraph, on May 30 the U.S. government filed documents with the Supreme Court seeking to dismiss Coinbase user James Harper's appeal against the IRS's acquisition of his cryptocurrency transaction records. Solicitor General D. John Sauer stated that under the Fourth Amendment, Harper has no privacy rights over financial records stored at Coinbase, as this data was "voluntarily" shared with the exchange and obtained by the IRS through lawful judicial procedures.
The case stems from the IRS's 2016 investigation into cryptocurrency taxation, during which the agency found numerous Coinbase users had failed to report crypto gains and subsequently obtained a "John Doe" summons requiring the exchange to submit records of high-volume users. Harper sued, arguing this constituted an unconstitutional search, but lower courts ruled that Coinbase records are business documents rather than personal private documents, making the IRS's actions lawful.
The government cited precedents such as United States v. Miller to emphasize that users have no reasonable expectation of privacy in financial records held by third parties, and noted that Coinbase's privacy policy explicitly warns users that information may be shared with law enforcement agencies.
The Supreme Court has not yet decided whether to hear the case. If it declines, the First Circuit Court of Appeals' ruling in favor of the IRS will stand.
