SAN FRANCISCO—Coinbase, one of the largest Bitcoin firms in the world, is facing off against the IRS over privacy issues.
The IRS has issued a summons asking for the financial details of several prominent Bitcoin users based on the evidence that they may have violated U.S. tax laws, according to IBS Intelligence.
“Since Coinbase is an AML/KYC compliant entity, it is required to collect personal information about its customers. This means that transactions traced back to Coinbase wallets can reveal the real identity of its users. This has left many worried in the community and has led to Coinbase announcing that it will challenge the move in court,” IBS Intelligence explained.
“Our customers may be aware that the U.S. government filed a civil petition yesterday in federal court seeking disclosure of all Coinbase U.S. customers’ records over a three-year period,” Coinbase stated in a blog posting. “The government has not alleged any wrongdoing on the part of Coinbase and its petition is predicated on sweeping statements that taxpayers may use virtual currency to evade taxes.”
IBS Intelligence reported that Coinbase has said that although its general practice is to “cooperate with properly targeted enforcement enquiries,” it is concerned with the “indiscriminate breadth” of the IRS’ requests.