The eyes of the cryptocurrency community are on Coinbase ever since it got served with a John Doe summons by the IRS. The summon requires Coinbase to hand over all information pertaining to the platform’s users between 2013 and 2015.
The issue of generic, blanket information request by the IRS has given rise to few questions regarding the powers of the government institution and constitutional rights of individuals. Even though Coinbase has filed an appeal against the summons in the court, actions of the government taxation body are worrying. The information demanded by the IRS includes a list of all accounts along with their information, balance, records of activity and transactions.
For starters, the jurisdiction and authority exerted by the IRS itself are questionable. Bitcoin enjoys a unique position in the US financial ecosystem. The digital currency is categorized as money, property, commodity and what not, making it fall under the jurisdiction of multiple government agencies. Even though John Doe summons is issued on multiple occasions by the IRS to banking institutions in the past, it was mainly for fiat currency related transactions and the banks were required to furnish information on US citizens alone.
In the case of