A couple weeks back, we wrote about a ridiculous and massively overbroad demand from the IRS that virtual currency exchange/online wallet host Coinbase turn over basically all info on basically all Coinbase users. They did this because they saw evidence of a single person using Bitcoin to avoid paying taxes. Coinbase expressed concern over this, but Judge Jacqueline Scott Corley didn’t seem too concerned, and has granted the IRS’s request by literally rubber stamping the DOJ’s request. I know it’s not all that uncommon for judges to accept “proposed orders” but it’s still a bit disturbing to see it happen on something with potentially massive consequences.
Coinbase has indicated that they’re going to push back on this legally, but it’s still quite unfortunate that the judge didn’t seem all that concerned about this. While Coinbase says it expected the court to grant this order, and that “we look forward to opposing the DOJ’s request in court,” it’s unfortunate how quick judges are to agree to these kinds of orders. Either way, this is going to be a case to follow.