Coinbase has joined a growing legal coalition urging the U.S. Supreme Court to revisit outdated surveillance laws that allow the IRS to obtain crypto user data without warrants or suspicion. In a newly filed amicus brief, the company supports the plaintiff in Harper v. O’Donnell—a case that could significantly reshape the privacy landscape in the digital economy.
The case challenges the IRS’s use of “John Doe” summonses, which permit the agency to request bulk data from third parties without identifying specific individuals. In 2016, the IRS used this tactic to demand personal and financial information from more than 14,000 Coinbase users, citing potential tax evasion. The request was made without alleging wrongdoing by any individual.
Coinbase argues that such sweeping surveillance—enabled by the “third-party doctrine”—is outdated and incompatible with today’s digitally interconnected world. Originating from rulings in the 1970s, the doctrine holds that users relinquish their Fourth Amendment protections once they share data with third parties like banks or phone companies.
But Coinbase, joined by X (formerly Twitter), several state governments, and digital privacy groups, says this logic no longer holds. In an age where digital platforms mediate nearly all financial and personal activity, the unchecked collection of massive user datasets represents a fundamental threat to constitutional privacy rights.
Coinbase Warns of ‘Financial Ankle Monitor’ Tactics
At the heart of Coinbase’s argument is a call to redefine Fourth Amendment protections for the digital age. The company asserts that crypto surveillance by the IRS—particularly through John Doe summonses—goes well beyond traditional oversight. When combined with blockchain’s permanent, transparent ledger, the surveillance becomes uniquely invasive.
Coinbase argues that using an exchange should not equate to forfeiting privacy. Blockchain transactions, while pseudonymous, are traceable and enduring, revealing an individual’s entire financial life over time. Granting the government warrantless access to this data, the brief claims, amounts to installing a “real-time financial tracking system” on citizens.
To reinforce its position, Coinbase draws parallels to Carpenter v. United States (2018), where the Supreme Court ruled that warrantless cell phone location tracking violated the Fourth Amendment. The company argues that the IRS’s approach to crypto is even more invasive—akin to a “financial ankle monitor” that tracks past, present, and future activity.
A Chance to Redefine Digital Privacy Rights
Coinbase has long advocated for a modernized approach to digital privacy law, especially around personal data stored on decentralized platforms. In its Supreme Court filing, the company urges justices to reexamine—or abandon—the third-party doctrine in the context of blockchain.
The brief notes that while blockchain offers pseudonymity, it does not offer full anonymity. Each transaction is public and traceable, and when combined with surveillance tools, this transparency becomes a liability for personal privacy.
If the Supreme Court agrees to hear Harper v. O’Donnell, oral arguments could begin as early as the next term. A ruling favoring privacy advocates would not only reshape Fourth Amendment standards but also force regulators, law enforcement, and financial institutions to reconsider how user data is collected, stored, and used—particularly in the fast-growing digital asset space.
Quick Facts
- Coinbase filed a Supreme Court amicus brief, opposing the IRS’s use of warrantless data collection.
- The case, Harper v. O’Donnell, challenges the use of the third-party doctrine in digital finance.
- X (formerly Twitter) and several privacy groups are backing Coinbase’s position.
- Legislative efforts—including the reversal of an IRS DeFi rule—reflect a shifting regulatory climate for crypto.
