Users who bought, sold or sent more than $20,000 worth of digital currency targeted
November 30, 2017
A court in California ordered a cryptocurrency exchange to hand over the identities of thousands of users this week to the Internal Revenue Service (IRS).
Coinbase, one of the internet’s most popular sites for selling and buying digital currencies such as Bitcoin, must give the federal government the names, birthdates, addresses and account activity of 14,355 users.
Although the IRS originally attempted to obtain records for every user on Coinbase, the year-long court battle ended with users who bought, sold, sent or received more than $20,000 worth of cryptocurrency being targeted.
The IRS argued that despite those nearly 15,000 users dealing in large qualities of cryptocurrency, only “800 to 900 taxpayers a year have electronically filed returns” mentioning digital currencies between 2013 and 2015.
Coinbase Co-Founder and CEO Brian Armstrong pushed back against the federal government’s inquiry in January prior to the ruling.
“Asking for detailed transaction information on so many people, simply for using digital currency, is a violation of their privacy, and is not the best way for us to accomplish our mutual objective,” Armstrong wrote.
Following the ruling, Coinbase’s David Farmer stated the company was “proud to fight for our customers and in the result we were able to achieve as a small company against a large government agency.”
Coinbase has said it will inform any users prior to handing their information over to the IRS.
With Bitcoin surpassing $11,000 in value on Wednesday before sliding back down to $9,000, users of cryptocurrency are expecting the federal government to take a larger interest.
Although Federal Reserve Governor Randal Quarles warned of “serious financial stability issues” if cryptocurrencies “achieve wide-scale usage,” Bitcoin continues to grow in popularity – even among Wall Street circles.
This article was posted: Thursday, November 30, 2017 at 2:11 pm