Supreme Court Upholds IRS Access to Crypto User Data Without Warrants

The Supreme Court has declined to hear a case challenging the Internal Revenue Service's (IRS) ability to access cryptocurrency user data, thereby upholding the agency's right to collect such information without individual warrants. This decision has significant implications for privacy and the legal landscape surrounding cryptocurrency transactions.

The case in question revolves around James Harper, a Coinbase user who attempted to prevent the IRS from accessing his cryptocurrency trading records. Harper argued that the IRS's access to his records amounted to an unlawful search and seizure under the Fourth Amendment. However, the Supreme Court's refusal to hear the case means that the lower court's ruling in favor of the IRS stands. This ruling allows the IRS—and potentially other agencies—to request crypto-related data from service providers without directly notifying the individual.

The decision has raised concerns about privacy, as it sets a precedent for government agencies to access personal data without individual warrants. Coinbase had warned that this decision could affect privacy beyond just cryptocurrency users, potentially impacting other areas where personal data is stored by third-party service providers. The ruling is based on the third-party doctrine, which holds that individuals have a reduced expectation of privacy in information shared with third parties.

The Supreme Court's decision not to hear the case means that the IRS can continue to seek crypto user data without individual warrants. This could have broader implications for how personal data is handled and protected in the digital age. The ruling underscores the need for ongoing discussions about privacy rights and the balance between government oversight and individual privacy.