Coinbase must share users’ cryptocurrency data with the IRS
Coinbase will be forced to share the financial information of 14,355 users with the Internal Revenue Service (IRS), following a California federal court ruling. The move follows a year-long battle between the cryptocurrency company and the IRS, which believes a high number of customers are failing to report holdings on their taxes. Coinbase has some six million users, but fewer than 1,000 have officially declared cryptocurrency activity.
The data sharing affects every user who has bought, sold, sent or received more than $20,000 through their accounts in a single year between 2013 and 2015 — which Coinbase estimates to be 14,355 individuals. The company will have to turn over the user’s name, date of birth, address and taxpayer ID, plus records of all account activity.
The ruling is narrower than the original request made by the IRS, which wanted to see records on all Coinbase users over the same period. Still, Coinbase — and the cryptocurrency world in general — is none-too-happy with the result. Speaking to The Verge, Coin Center’s Peter Valkenburgh said that without better justification from the IRS about why customer accounts are suspicious, “a similarly sweeping request could be made for customer data from any financial institution”, and that it “sets a bad precedent for financial privacy”. However, the case does highlight the need for better tax reporting methods on the cryptocurrency landscape — something some users, no doubt, have been hoping to avoid.
Via: The Verge
Source: United States District Courts