PANews reported on May 31 that according to Cointelegraph, the US government argued in a document filed with the Supreme Court that Coinbase user James Harper had no right to prevent the Internal Revenue Service (IRS) from obtaining his cryptocurrency transaction records. In a document filed on May 30, US Attorney General D. John Sauer argued that Coinbase user James Harper did not have the right granted by the Fourth Amendment to protect his financial records held on the exchange. The government claimed that Harper "voluntarily" shared his data with Coinbase and that the IRS followed due process and obtained the data through a judicially approved subpoena.

Harper’s case revolves around an IRS investigation into widespread underreporting of cryptocurrency gains in 2016. At the time, the IRS found that millions of Coinbase users were trading Bitcoin, while relatively few taxpayers were reporting cryptocurrency gains, and subsequently forced Coinbase to hand over records of its high-volume customers.

Harper, who traded Bitcoin on Coinbase during the relevant years, later sued, claiming that the IRS’s actions constituted an unconstitutional search of her personal records. A lower court disagreed, ruling that Coinbase’s records were business documents, not Harper’s personal documents, and that the IRS’s actions were legal. In its complaint, the government argued that Supreme Court precedent supports the IRS’s position. The government cited past cases that emphasized that individuals have no reasonable expectation of privacy in their financial records held by a third party, Coinbase. The Supreme Court has not yet decided whether to hear the case. If it dismisses, the First Circuit’s ruling in favor of the IRS will remain intact.