December 1, 2017
It has been a while since we last heard anything regarding the ongoing Coinbase-IRS case. With a federal court having to determine whether or not this exchange needed to hand over customer information, an interesting precedent was set. It seems the exchange will have to hand over the information after all. This pertains to users who transacted over US$20,000 between 2013 and 2015. A total of 14,355 users will be affected by the decision.
Coinbase Information Will Change Hands
It is not entirely surprising to see Coinbase being forced to hand over customer information. The legal battle between the exchange and the IRS has been going on for quite some time now. A John Doe summons was issued against the exchange last year for information over a specific period. Initially, the exchange successfully fought back, but it seems most of its efforts were in vain. With 14,355 platform users having their information turned over to the government agency, it will be interesting to see if anything comes to light.
Almost a year after the initial John Doe summons, a verdict has been delivered in the IRS’s favor. It remains to be seen if the overall Bitcoin community will be pleased with this development. Unfortunately, there is nothing they can do about this decision, even if they wanted to. The information from 2013 to 2015 regarding transactions totaling over US$20,000 is of keen interest to the IRS. It is thought that someone used the exchange to either launder money or evade taxes, though nothing has been proven at this stage.
Although Coinbase is not at fault for being forced to hand over the information, there will be some backlash against the platform. Speculation is running wild on social media regarding investors potentially pulling out of the company, although that is nothing but rumor right now. Coinbase itself has nothing to worry about if it adhered to all guidelines and rules, after all. The bigger question is whether or not the company did exactly that, or if something nefarious is going on that we don’t know about.
Bitcoin users will not be too happy about their information being shared with the US government, though. As a result, we may see more and more people flock to more privacy-centric cryptocurrencies, such as Monero. Bitcoin is, by default, too transparent to conduct illegal activity with. Not every Coinbase user utilizes Bitcoin for illicit activity, but some people assumed it would serve to keep their financial wealth hidden from the IRS. That is not the case whatsoever, and it once again shows why privacy should matter in the cryptocurrency world.
According to Coinbase, this verdict will affect a total of 8.9 million transactions. That is pretty significant, as it only pertains to users transferring US$20,000 or more. While everyone knows this platform is very popular, few people expected such high rollers to be the norm on Coinbase. It isn’t entirely surprising to see the IRS show a keen interest in this company when it knows large amounts of money are changing hands on a regular basis.
In the end, this is an interesting development for many different reasons. The information to be handed over is only a fraction of what the IRS initially requested. Keeping that in mind, this verdict is almost a victory for the Bitcoin community. It will be quite interesting to see what comes to light thanks to the information handed over. For now, this news has had very little effect on the Bitcoin price, as it already saw a massive correction on Wednesday.