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posted by on Wednesday November 30 2016, @04:17AM   Printer-friendly
from the they'll-never-find-it-in-the-cloud dept.

American Banker reports on a potential privacy threat to users of digital currency exchange platform Coinbase:

Under a procedure called a John Doe summons, the IRS this month asked a federal court in California to approve its request for Coinbase to turn over records on any user who had made digital currency transactions between 2013 and 2015.

At issue is the indiscriminate nature of the request. Coinbase has accumulated nearly 5 million users, according to its website – which could mean the company might be forced to turn over financial records on millions of U.S. taxpayers.

In the past, the IRS had targeted a number of banks with John Doe summonses. The requests were broad, but did not ask financial institutions to turn over information on every single one of their accountholders as the IRS is now demanding Coinbase do, industry lawyers said.


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  • (Score: 5, Insightful) by maxwell demon on Wednesday November 30 2016, @06:49AM

    by maxwell demon (1608) on Wednesday November 30 2016, @06:49AM (#434834) Journal

    This is not about Cash vs. Bitcoin. If you mined your Bitcoin, or sold stuff for Bitcoin, that company won't have any records of you. Only if you used Coinbase to convert other currency into Bitcoin, there's a record. But that's not much difference to there being a record if you draw cash from an ATM.

    The Bitcoin side of the transaction is stored on the blockchain, and the IRS won't need a John Doe summons to get that, and if you use Bitcoin the way you use cash, then the information in the blockchain is all the IRS can get.

    In short: This is completely independent of any Bitcoin weaknesses. Indeed, I'd say it's not really about Bitcoin, it's about users of an exchange platform. The fact that this exchange platform trades Bitcoin rather than e.g. gold is secondary.

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