coinbase2 - Coinbase - Partial Win In Legal Battle With the IRS

Coinbase – Partial Win In Legal Battle With the IRS

Coinbase, the cryptocurrency platform based in California, has won a partial victory against the IRS regarding the information of about 500,000 customers. Fortunately for the users’ privacy, Coinbase could reduce significantly the amount of data required by the IRS, arriving at 14,000 customers. Furthermore, the IRS agreed to receive less information than the originally requested.

Legal Victory for Coinbase

In the last twelve months, Coinbase was involved in a legal process with the IRS. The IRS is the Internal Revenue Service that is in charge of the United States’ tax collection. For the IRS, some Bitcoin holders in the platform were not paying the right amount of taxes regarding their profits.

This is the reason why, the IRS has requested the disclosure of certain customer’s records between the years 2013 and 2015. Coinbase could not only reduce the number of customers’ involved but was also able to cut significantly the amount of data requested from these users.

David Farmer, Director of Communication at Coinbase released a statement where he expressed as follows:

“The government’s own lawyers noted at the hearing that the IRS is not accustomed to having to fight for records in this context, and most companies just turn records over without going to court. Thanks to Coinbase’s efforts, more than 480,000 customers’ records were preserved from disclosure. This is a 97% reduction in the number of customers impacted by this summons.”

According to Coinbase, different companies disclose users’ information as soon as they get the IRS behind. That means that the current legal victory could be used for other institutions in order to protect customers’ privacy. Moreover, the company has commented that it will inform the different customers involved in the disclosure before any information is released.

About the regulatory situation, the company has written in another document:

“We were proud to appear in the court today, together with support from industry colleagues, to continue to fight against what we believe to be government overreach, In the future we hope to work with the IRS to establish a reasonable tax reporting method that makes sense for virtual currency service providers and consumers alike.”

During the last hours, Coinbase was performing maintenance activities in the platform due to high traffic. The cryptocurrency market has experienced extremely volatile moments in the last days. Bitcoin price fluctuated between $8,000 and $11,400 dollars in question of hours. Indeed, Bitcoin has managed more than $11 billion dollars in volume in less than 24 hours. At the moment this virtual currency is being traded around $9,200 dollars.