Coinbase, the U.S.-based cryptocurrency exchange, has recently filed an amicus brief in a significant Supreme Court case concerning a request by the Internal Revenue Service (IRS) for extensive data on its users, which dates back to 2016.

In this legal battle, Coinbase argues that the IRS is overstepping its bounds by seeking customer transaction records of hundreds of thousands of individuals, asserting that these actions could infringe on Americans’ privacy, particularly regarding digital information held by third-party service providers. The IRS’s demand for such data stems from a 2016 investigation meant to probe potential tax violations amid rising concerns about cryptocurrency transactions.

“The court should intervene to clarify that the third-party doctrine does not allow the IRS to conduct dragnet searches,” Coinbase contended.

This case arises from previous disputes where a Coinbase customer, James Harper, challenged the IRS’s practices, claiming excessive reach concerning his financial records. Harper’s lawsuit highlighted how the government can undermine user privacy by linking blockchain activity to individuals, thereby increasing susceptibility to surveillance.

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