IRS Orders Release of 15k Cryptocurrency Traders’ Identities

By Owen Heimsoth | USA

The IRS is ordering Coinbase to turn over the identities of 14,355 users of the popular cryptocurrency website.

A Northern District of California Court has ordered popular cryptocurrency website to turn over the name, birthdate, address, and account activity of any user who has been involved in a transaction worth more than $20,000 USD. This includes buying, selling, receiving, or sending.

The initial summons wanted Coinbase to turn over the information of all users who made a transaction at any time from January 1, 2013, to December 31, 2015. The order reads: “It requested nine categories of documents including complete user profiles, know-your-customer due diligence, documents regarding third-party access, transaction logs, records of payments processed, correspondence between Coinbase andCoinbase users, account or invoice statements, records of payments, and exception record produced by Coinbase’s AML system.”

After eight months of fighting by Coinbase, the IRS requested that Coinbase only turn over the identification of users who made transactions equaling over $20,000. According to Coinbase, there were 8.9 million transactions that were over $20,000. Coinbase would refuse to comply.

In March 2017, the two parties would try to explore scenarios where Coinbase would comply with the IRS. This came to an unsuccessful end in July.

The court wrote, “Based upon an IRS search, only 800 to 900 persons electronically filed a Form 8949 that included a property description that is ‘likely related to bitcoin’ in each of the years 2013 through 2015.” 

According to Coinbase, they serve 5.9 million customers. This is obviously a move by the IRS to find those not paying the appropriate taxes. The IRS defines virtual currencies as property for tax purposes. This means that the capital gains tax would apply to them. More can be found here.

On November 28, the court would order Coinbase to turn over the Taxpayer ID Number, name, address, birthdate, and account records of anyone who made a transaction worth more than $20,000 from 2013 to 2015.

Coinbase Director of Communications wrote a blog post on the matter on November 29. He said, “We are pleased to say Coinbase won a partial victory in court today. Although the Court did not completely quash the government summons compelling disclosure of certain customers’ records from the period 2013–2015 as we requested, we were proud to accomplish two important victories for our customers.” He would later mention the two victories being the narrowing the scope of summons and the quantity of data to be released. He would also promise to keep their customers up to date on the matter.

1 thought on “IRS Orders Release of 15k Cryptocurrency Traders’ Identities”

Comments are closed.