Coinbase IRS Update

Coinbase appeared in federal court today to continue the fight for our customers’ privacy rights. Nearly one year ago, the IRS initiated proceedings to obtain copies of essentially all our U.S. customers’ records for the three-year period 2013–2015. The government has never alleged any wrongdoing on the part of Coinbase. Coinbase has persistently opposed the government’s summons, not because we were looking to pick a fight, but because we felt it was important to stand up for our customers and the industry.

In fact, Coinbase has already earned a big win. The government initially sought private financial records of approximately 500,000 account holders. In response to Coinbase’s continuing fight, the IRS significantly reduced the scope of the summons to approximately 14,000 customers. Although this 97% reduction in impacted customers is a big win for our customers, the IRS still took Coinbase to court to obtain a sweeping set of customer records. Today we argued, even as narrowed, the summons is still unjustified and invasive to our customers.

We were proud to appear in 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.

We expect to hear more in the coming days and will keep customers updated.