Supreme Court Upholds IRS Access to Coinbase User Data for 14,000+ Accounts

* IRS access to Coinbase user data upheld after Supreme Court declines to hear case. * Ruling reinforces “third-party doctrine,” raising concerns for digital privacy. On June 30, 2025, the U.S. Supreme Court declined to hear the pivotal legal case of *Harper v. Faulkender*. This decision leaves in place a First Circuit Court ruling that compels Coinbase to provide the Internal Revenue Service (IRS) with transaction data for over 14,000 users. As a result, the outcome has far-reaching implications for cryptocurrency user privacy and reinforces the controversial "third-party doctrine" for digital platforms. This legal dispute began when James Harper, a Coinbase user, contested the IRS's use of a "John Doe" summons to collect data from the cryptocurrency exchange, claiming this action violated his Fourth Amendment protection against unreasonable searches and seizures. However, lower courts sided with the IRS, citing the third-party doctrine from *United States v. Miller (1976)*. This doctrine holds that people forfeit privacy expectations for information they voluntarily share with third parties, such as financial institutions. The Supreme Court's refusal to review the case upholds this interpretation and affirms the IRS's authority to access such data. Privacy advocates and cryptocurrency stakeholders hoped the Supreme Court would use this case to revisit the third-party doctrine's role in the digital age. In an amicus brief, for instance, Coinbase warned that upholding the lower court’s ruling would enable “real-time” government monitoring of blockchain-based financial activities. The company argued this could undermine user privacy and bolster surveillance capabilities. The federal government opposed Harper's appeal, arguing that when individuals transact through platforms like Coinbase, they inherently waive their Fourth Amendment protections. The Supreme Court’s decision not to hear the case leaves current legal interpretations unchanged, thereby maintaining the status quo for privacy protections—or the lack thereof—in cryptocurrency transactions. The ruling has sparked renewed calls for Congress to update financial privacy laws for the digital era. Legal analysts caution that the decision not only underscores the IRS’s power to use third-party data for tax enforcement but also could set a broader precedent for more government scrutiny of individual activities on digital platforms. While future litigation or new legislation might eventually reshape the legal framework, for now, the decision highlights the importance of balancing privacy with compliance in the evolving digital landscape. According to CoinMarketCap, Bitcoin (BTC) was trading at $30,452 as of 12:00 UTC on June 30. This marked a 1.8% uptick in its 24-hour trading volume. Meanwhile, Ethereum (ETH) had similarly climbed to $2,146, reflecting a 2.1% increase. Despite ongoing regulatory scrutiny, these market moves underscore sustained investor interest in cryptocurrency and blockchain technology.