Coinbase is a digital asset broker based in San Francisco, the platform allows users to buy and sell Bitcoin, Litecoin and Ethereum. To say its popular with those involved with cryptocurrency is a understatement, the app has made it into the iOS top ten. In fact the app is currently sitting above the Spotify App.
AmericaÂs Internal Revenue Service (IRS) sough to uncover the personal data of CoinbaseÂs users, it initially requested the details of 480,000 users. The court did not agree but nonetheless ordered coinbase to provide the name, address, taxpayer identification numbers and date of birth of customers whom had brought, sold, sent or received sums of $20,000 or higher between 2013 and 2015.
However, whilst not happy, Coinbase is claiming a partial victory. The online exchange explained in a blog post that: ÂThanks to CoinbaseÂs efforts, more than 480,000 customersÂ records were preserved from disclosure. This is a 97% reduction in the number of customers impacted by this summons. Second, the quantity of data we must produce for the approximately 14,000 customers who remain in scope has been significantly reduced.Â
The case is the result of the fact that tax authorities are aware that many tax returns do not include gains made form cryptocurrencies. This is in turn based on the fact that there are many people out there with a newfound wealth, for example Bitcoin recently rose to an all time high of over $11,000.
The case sets a dangerous precedent and provides a clear warning to those in the US: the IRS is potentially watching you if you have brought or sold more than 2 Bitcoins at a time.Â