The IRS has secured a partial victory in its long-running court case to obtain trading and personal details of users on the Coinbase platform. A Californian federal court has ruled that Coinbase must surrender records identifying users who have bought, sold, sent or received over $20,000 through their accounts between 2013 and 2015 with Coinbase estimating that over 14,000 users meet this standard.
This is a massive development within the cryptocurrency world as it potentially opens the door to an unravelling of the principles of anonymity that are highly valued by users. The ruling has been condemned by many in the cryptocurrency community who have framed the decision as a gross invasion of privacy and sweeping use of government power. The IRS has hit back at these claims by pointing to the difference between Coinbase user data and the number of US citizens reporting cryptocurrency transactions to the IRS, suggesting that the IRS thinks there is a significant amount of tax evasion occurring among holders of bitcoin and other cryptocurrencies.
This is not just a significant development for holders of cryptocurrencies in the US but could have substantial repercussions globally. Cryptocurrencies currently exist in a legal grey area especially concerning taxation and regulators around the world are likely to follow the US regarding the growing legal framework around cryptocurrency trading.
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