Supreme Court Upholds IRS Crypto Data Access 542 Million Euro Fraud Network Busted in Europe

Government scrutiny over cryptocurrency intensified on both legal and enforcement fronts this week. In the United States, the Supreme Court declined to hear a case brought by a Coinbase user who claimed the IRS violated his Fourth Amendment rights by obtaining his financial data through a broad exchange summons. The decision lets a lower court ruling stand, reinforcing the government’s ability to access crypto transaction data for tax enforcement.

James Harper, a cryptocurrency user, alleged that the Internal Revenue Service (IRS) violated his Fourth Amendment rights by obtaining his personal financial data through a sweeping summons to Coinbase. The Supreme Court issued its decision on Monday, leaving in place a ruling by the US Court of Appeals for the First Circuit, which sided with the IRS. The case originated in 2020, when Harper sued the federal tax agency and several of its officials, claiming that they unlawfully conducted a search and seizure of his private financial information. Harper’s legal team argued that the IRS had overstepped its constitutional authority by demanding his user data from Coinbase without a warrant or individualized suspicion.

At the heart of the case is a 2016 “John Doe” summons issued by the IRS to Coinbase, one of the largest cryptocurrency exchanges in the United States. The summons required the company to turn over account information for over 14,000 users who transacted more than $20,000 in Bitcoin between 2013 and 2015. Harper, who claims he properly reported his transactions and paid taxes, said he was swept up in the mass data collection effort despite having no direct contact with the agency beforehand. Harper’s lawsuit sought to challenge the legality of such sweeping data requests, arguing that they violated his right to privacy and constituted an unreasonable search under the Fourth Amendment. However, the US District Court for the District of New Hampshire dismissed the case in 2021, and the First Circuit later upheld that decision, effectively denying Harper legal recourse.

Coinbase itself filed an amicus curiae brief in support of Harper, warning the Supreme Court of the precedent the lower court ruling could set if left unchallenged. The company said the IRS’s broad approach could allow the government to “trace users’ every crypto transaction in the past and monitor every crypto transaction in the future,” raising significant concerns about financial surveillance. Paul Grewal, Coinbase’s Chief Legal Officer, was outspoken about the broader implications. In a post on X (formerly Twitter), he said: “We believe in tax compliance, but this goes far beyond a narrow and tailored request and far beyond crypto. This applies to banks, phone companies, ISPs, email, you name it [...] you should have the same right to privacy for your inbox or account as you have for a letter in your mailbox.” Despite these warnings, the Supreme Court’s decision not to review the case effectively allows the IRS to continue utilizing broad data requests to cryptocurrency platforms, sparking renewed debate over digital privacy rights in the U.S.

By refusing to hear Harper’s appeal, the Supreme Court has allowed a significant precedent to stand—one that critics argue could weaken Fourth Amendment protections in the digital age. Privacy advocates warn that the ruling could embolden federal agencies to use sweeping surveillance tactics not just in the cryptocurrency space, but across a range of digital platforms and services. With no further judicial review available, Harper’s case now becomes a cautionary tale for digital asset holders in the United States. It also raises urgent questions about the balance between tax enforcement and constitutional rights in an increasingly digital economy.

Meanwhile in Europe, Europol announced the arrest of five individuals allegedly involved in a €460 million cryptocurrency investment fraud network spanning Spain, and other jurisdictions. According to a statement released on Monday, the arrests were made by Spain’s Guardia Civil with support from Europol, the United States, France, and Estonia. Authorities allege that the network defrauded more than 5,000 victims out of €460 million—approximately $542 million at the time of publication—through a sophisticated web of deception involving fake crypto investment products, shell companies, and international money laundering techniques.

The coordinated crackdown took place last Wednesday, with three suspects apprehended and properties searched in Spain’s Canary Islands, while two more arrests were executed in Madrid. These raids led to the seizure of electronic devices, documents, and bank records believed to be connected to the fraudulent scheme. Authorities believe the operation was led by a core group of individuals who oversaw a network of global accomplices. These associates were responsible for soliciting funds from unsuspecting investors through a variety of channels, including direct bank transfers, crypto transfers, and even cash withdrawals.

As part of the investigation, officials discovered a vast corporate and banking infrastructure allegedly designed to obscure the flow of criminal proceeds. This included companies registered in Hong Kong and user accounts at various crypto exchanges under fictitious or borrowed identities. Payment gateways were also reportedly exploited to funnel illicit gains across jurisdictions and convert them into hard-to-trace assets. This operation follows months of investigative work, including digital forensics, financial surveillance, and inter-agency intelligence sharing. In January, Spanish authorities had already frozen over $26 million in digital assets tied to a similar money laundering probe, which may now be linked to the same criminal organization.

The arrests come amid a wave of international crackdowns on cryptocurrency investment scams. Just last month, the US Department of Justice announced the seizure of more than $225 million connected to so-called ”pig butchering” schemes. In these cases, scammers build trust with victims over time—often through social engineering on dating apps or messaging platforms—before persuading them to pour large sums into fake crypto investments. In a separate case also reported in June, five men pleaded guilty in a US federal court to running a $37 million crypto scam involving assets being transferred to Cambodia. These cases highlight the cross-border nature of digital financial crime and the increasing willingness of law enforcement agencies to work together in response.

The $542 million fraud in Spain shows not only the sophistication of modern financial crime but also the urgent need for clearer regulatory frameworks around digital asset investments. Authorities are urging potential investors to exercise caution and verify the legitimacy of any crypto-related opportunity—especially those promising high or guaranteed returns. Europol continues to emphasize that successful prosecution of such schemes relies on strong international cooperation and technological expertise. With billions at stake and criminal networks growing bolder, cross-border law enforcement partnerships are likely to become the norm in the fight against digital financial fraud.