Court Rubber Stamps IRS's Demand To Get All Coinbase User Data
from the um... dept
A couple weeks back, we wrote about a ridiculous and massively overbroad demand from the IRS that virtual currency exchange/online wallet host Coinbase turn over basically all info on basically all Coinbase users. They did this because they saw evidence of a single person using Bitcoin to avoid paying taxes. Coinbase expressed concern over this, but Judge Jacqueline Scott Corley didn't seem too concerned, and has granted the IRS's request by literally rubber stamping the DOJ's request. I know it's not all that uncommon for judges to accept "proposed orders" but it's still a bit disturbing to see it happen on something with potentially massive consequences. Coinbase has indicated that they're going to push back on this legally, but it's still quite unfortunate that the judge didn't seem all that concerned about this. While Coinbase says it expected the court to grant this order, and that "we look forward to opposing the DOJ's request in court," it's unfortunate how quick judges are to agree to these kinds of orders. Either way, this is going to be a case to follow.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: bitcoin, cryptocurrency, data, doj, irs, privacy, taxes
Companies: coinbase
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Coinbase was never allowed to argue against the order and it done all in ex parte fashion, which is a series violation of Coinbase's due process rights.
If this survives a challenge, I would be very surprised and shocked at this violation of someone's legal rights to due process. It's akin to holding a trial against a defendant without allowing that defendant to confront his or her accusers.
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Not a single shred of the US Constitution stands as we are 100% at the mercy of how much "rights" the government wants to allow us to have.
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IRS
I appreciate Coinbase standing up for their users' rights, but why not complain about BofA or ADP, who already turn over everything.
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Scott is a fictional character.
Jacqueline is a actress.
Judge is an actor.
So is she an actor in a fictional pirate drama?
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Once you give government certain powers, they are reluctant to give them back and this definitely sets a very bad and dangerous precedent.
Simply put, ex-parte discussions with a judge without the opposing attorney is simply a serious violation of jurisprudence. Most federal appellate courts toss out ex-parte rulings because they seriously undermine the defense of someone accused of a crime.
There are certain types of decisions that can be overturned but this particular decision in this case involving Coinbase, it's going to be hard for the federal courts to uphold this order from this idiot judge.
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All your base are belong to US
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Money laundering is an easy activity as long as
Only the stupid get caught when laundering money. There are so many legitimate ways of laundering successfully. As long as there are no discrepancies between taxable income, valid expenses and tax paid, one will never be investigated.
The problem is that the entities doing the laundering don't feel comfortable paying tax to a government, though they are more than happy to pay others an appropriate rate of taxation.
Whenever a government looks for money laundering, they miss the boat on the majority of it.
At one time, there was an estimate that for every $1 legitimately in the financial system, there was $1000 that was from illegal/criminal activities flowing through the same system.
A suggestion was made to remove all taxes and other government charges and just charge $0.01 per $100 for each financial transaction passing through the various banking systems. The estimate was that the governments would make more money from such a scheme than they currently do via income and other taxes.
Of course, such a simple idea is beyond the ability of any government to actually undertake.
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Or a bit at a time?
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It feels like I'm saying this a lot lately, but anyone surprised by this is simply not paying attention. This is exactly what people who understand money have been predicting for years now. Bitcoin is a scam, built on one fraud after another from the very beginning (remember Mt. Gox?) and no government is going to put up with untraceable, untaxable "currency" undermining their economy. (Particularly not one that's been so badly mismanaged that it ended up under de facto control of a group of Chinese hackers!)
I would call this move a warning shot, but honestly it feels more like a full-out opening salvo. If, for any reason, you own Bitcoin, you'd do well to sell now and leave someone dumber than you holding the bag.
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So to quote you, you'd do well to sell "your US Dollars" now and leave someone dumber than you holding the bag.
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But think of the Children!
Terror...
Um... is there some other kneejerk, rubber stamp excuse I'm missing?
See,Trump was right on one thing... it's a rigged system.
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