By
Godfrey Benjamin
April 25th, 2024
The IRC is seeking a narrower focus in its investigation of digital currency startup Coinbase
IRS is now seeking information exclusively for accounts that were spotted to be engaged in transactions worth $20,000 or more, instead of asking Coinbase for a long list of details about all its customers who conducted operations using bitcoin between 2013 and 2015 (for context, Coinbase has over a million customer accounts).
Last year the IRS demanded to see all of Coinbase’s customer account activity from 2013 to 2015. This very time gap saw a huge rise in bitcoin’s value – from $13 to over $1,100 . Then the agency stated, that extremely small number of people (around 800 according to different sources) declared their transactions related to bitcoin in 2015.
Despite the current narrower scope, the IRS stated that it could still seek more information on the talked about users, writing that it may still “issue summonses in individual examinations of Coinbase users for the information that it no longer seeks in this proceeding”.
Interesting, that in case Coinbase had proceeded with the initial IRS’ summons, it would have made the exchange disclose personal details of over a million accounts, and over 500,000 active customer accounts. The scope of the summons provoked great indignation among digital currency owners, and led senior members of Congress to send a sharply worded letter to the IRS that highlighted that its probe was “overly broad” and “extremely burdensome.” Probably, this occasion served as a prerequisite for agency’s termination of seeking passwords and security settings for the accounts.
Whether the anonymous Coinbase customers will withdraw their lawsuit, because of the concessions made by the IRS, or they will push the court to continue limiting the summons is still open to question. Worth noting, that despite Coinbase is not directly involved in the court dispute, it intends to come in on if the IRS failes to limit the scope of the summons.
Surprising, but through it all, the IRS actions did not have any effect on the price of bitcoin, which is trading around $2,375 at a press time, according to CoinMarketCap.
The main changes the IRS made to its request set out in the July 6 court filing, according to Fortune, include the following:
- Elimination of request for payment information and security settings.
- Elimination of request for power of attorney letters and corporate minutes tied to third parties.
- Limitation of request for correspondence between Coinbase and users to portions that cover account opening and closing, and transactions.
It is unknown whether the IRS is already investigating other exchanges besides Coinbase, or only schedules this proceeding in relation to them. But it is known, that Coinbase is scarcely the only exchange but it is by far the most famous in North America.