On June 30, the U.S. Supreme Court denied Coinbase’s request to block users’ data from the Internal Revenue Service (IRS).
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Coinbase Faces Legal Defeat Against IRS
In April, Coinbase submitted a legal document to the U.S. Supreme Court regarding a 2016 case where the IRS asked for data on many of its customers through a “John Doe” summons. The company argued that the court should ‘safeguard Americans’ privacy when their digital information is held by third-party services.
The U.S. tax agency (IRS) demanded financial records from Coinbase, arguing that once users share their data with a third party (In this case, the exchange), their transaction details should be accessible.
Coinbase challenged the request in court, pushing to limit its scope. After legal battles, the company was forced to hand over only a small portion of the requested data.
The U.S. Supreme Court has declined to review an IRS order that required Coinbase to hand over transaction records of over 14,000 cryptocurrency users. The court gave no reason for turning down the appeal.
The case stemmed from a customer who argued that the IRS violated his privacy rights under the Fourth Amendment, which protects against unreasonable searches. However, the justices did not take up the challenge, which leaves the IRS’s request in place.
After the Securities and Exchange Commission (SEC) dropped its case against Coinbase in February, the Supreme Court’s decision might spark panic in its community. Earlier, the SEC’s hostile stance has led to lawsuits against the two biggest cryptocurrency exchanges, Coinbase and Binance.
However, Donald Trump’s pro-crypto administration has intensified its legislative efforts to establish clear and friendly regulations for the crypto sector. This will end long-standing regulatory ambiguity.
“For the last several years, the Commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public,” Acting Chairman Mark T. Uyeda stated in an official announcement. “It’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that.”
Despite regulatory pressure, the crypto exchange has continued to expand its offerings amid bullish momentum in the crypto market. A few days ago, Coinbase introduced perpetual futures trading in the U.S., which makes it one of the first regulated exchanges to offer these contracts.
Until now, offshore platforms have dominated this market, handling over 90% of global crypto derivatives trading. Starting July 1, traders can buy and sell nano Bitcoin (0.01 BTC) and nano Ethereum (0.10 ETH) perpetual futures. These contracts will track real-time prices, allow leverage, and comply with U.S. derivatives regulations (CFTC).
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