U.S. District Court Judge Joseph Laplante dismissed a lawsuit filed by Coinbase trading platform customer James Harper.
User does not agree with the fact that the exchange passed his personal data to the Internal Revenue Service.
The trader has filed similar lawsuits against the agency multiple times, claiming that the IRS violates his constitutional rights to data privacy and confidentiality.
Recall that in 2016, the IRS asked Coinbase for user information to identify traders trying to evade taxes.
Initially, Coinbase management resisted the regulator’s demand, which evolved into a lawsuit. Ultimately, however, Coinbase was forced to provide the necessary information to the IRS.
Judge LaPlante ruled that the IRS’s methods, including obtaining personal information by special request, did not violate Harper’s rights to a fair trial and to protection from unreasonable searches and asset forfeiture.
The judge explained that by using the site’s services, Harper accepted its terms of service.
It is the exchange’s policy to share user data at the request of law enforcement or regulatory agencies. Plus, Coinbase is considered a legitimate custodian of customer data.
Therefore, the court found Harper’s arguments to be without merit because he had voluntarily provided the information to Coinbase.
Thus, the court’s decision expanded the authority of the IRS, which can send such requests to cryptocurrency exchanges in all circumstances.
In 2020, Coinbase said it would hand over to U.K. tax authorities data on customers who received more than £5,000 (about $6,184) worth of crypto assets in the last year.
Last year, Coinbase announced a service making it easier for traders to file tax returns.