Coinbase calls on the US Supreme Court to rethink the doctrine of digital privacy

• The crypto exchange asked the court to rethink the "third party doctrine" with regard to digital financial data.
• Although Coinbase is not directly involved in the procedure, the company has a great interest in how the court interprets data protection.
• It is expected that the Supreme Court will later decide whether it will listen to the case.

Together with several states, technology companies and interest groups,

Coinbase calls on the Supreme Court of the United States to review the long -existing standards for digital privacy that critics no longer see in harmony with the realities of the Internet age.

in an Amicus letter that in Harper v. O’Donnell was submitted, the crypto exchange asked the court to rethink the "third party doctrine" with regard to digital financial data.

2020, James Harper, a coinbase user, submitted a lawsuit against the IRS and claimed that the authority had illegally obtained information that had revealed his identity as a cryptocurrency holder.

Challenge of a decades of legal standards

The third party doctrine-which was established by decisions in the 1970s-states that individuals are shared their expectation of privacy about data that are shared with third parties such as banks or telephone companies.

Coinbase argues that this principle, if it is applied to blockchain and digital assets, grants the government authorities extensive surveillance options without the usually necessary judicial control for such interventions.

Although Coinbase is not directly involved in the procedure, the company has a great interest in how the court interpreted the data protection regulations in the context of financial data that is stored or processed on its platform.

Use of far-reaching prayers by the IRS in the focus

The case revolves around the use of a "John Doe" pre-charging by the Internal Revenue Service, which enables investigators to force third parties to disclose data on persons not mentioned by name.

2016 the IRS issued such a summons to Coinbase and called for user data from more than 14,000 customers as part of an attempt to identify people who may have been subdadented.

Similar to the chiefs and circle were later issued in 2021.

In contrast to traditional lectures, John-Doe inquiries are not bound to certain people, but aim to record data on broad user groups.

COINBASE claims that this investigation tool, if it is used in the area of digital assets, effectively enables IRS to "real -time monitoring" via user transactions.

Privacy in the blockchain age

In his letter, Coinbase emphasized the unique features of blockchain technology that enables observers to follow past and future transactions that are bound to a wallet address.

This level of visibility, according to the company, corresponds to what it calls "financial anklewell monitor". The letter draws comparisons to Carpenter v. United States (2018), a case in which the Supreme Court ruled that the preservation of historical location data from cell phones without a search order violates the fourth additional article.

Coinbase argues that the IRS's ability to reconstruct years of blockchain activities is even more intrusively.

"The disclosure of a person's identity on the blockchain opens a potentially wide window into the financial activities of this person," said the company and warned of the effects on the privacy and financial freedom of users.

It is expected that the Supreme Court later decide whether it will listen to the case this year. If assumed, oral hearings would probably be scheduled for the next term.

The executives of Coinbase, including CEO Brian Armstrong and Chief Legal Officer Paul Grewal, have consistently pleaded for updated legal framework conditions that reflect the developing character of digital finances.