A significant privacy battle is emerging in the U.S., with the Supreme Court being urged to intervene after the IRS allegedly violated constitutional rights by seizing financial data from over 14,000 cryptocurrency users without obtaining a warrant.
The pivotal case, Harper v. Faulkender, has the potential to reshape digital privacy protections for millions of Americans engaging in virtual currency transactions.
William Harper, a longtime Coinbase customer, received an unexpected notification from the IRS, which sparked the disagreement. Without prior notification or any specific allegations of misconduct, the agency had accessed his transaction history—along with that of roughly 14,000 other crypto users—through a controversial data request.
The IRS invoked a “John Doe” summons, typically used to investigate unknown tax offenders, to justify the mass collection of user data. However, Harper, who consistently reported his crypto assets and fulfilled his tax obligations, was stunned that his private financial records were obtained without a warrant or an opportunity to object.
Now, this challenge to the IRS’s tactics has escalated to the U.S. Supreme Court, placing the spotlight on the boundaries of government power and the future of crypto privacy rights.
At the heart of this legal battle is the “third-party doctrine”—a rule that permits government agencies to access your data from platforms like Coinbase without notifying you, simply because you voluntarily shared that data with the company.
Critics argue the doctrine is outdated. In the modern digital era, sharing personal information is a necessity for using apps, websites, and crypto wallets—but that doesn’t imply users consent to unrestricted government access. As digital life becomes the norm, many believe it’s time to redefine privacy boundaries for the age of cryptocurrency and data-driven platforms.
So far, lower courts have backed the IRS, ruling that individuals forfeit certain privacy protections when they use platforms like Coinbase. But if the Supreme Court agrees to hear the case, it could redefine how digital data is treated under the law—potentially reshaping the future of privacy for all cryptocurrency users in the United States.
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