Coinbase, one of the world’s biggest cryptocurrency trading platforms, will be forced to share financial information belonging to 14,355 users with the IRS, after a California federal court ruling.
This is the result of a year-long battle between the company and the Internal Revenue Service, which considers that several customers didn’t report holdings on their taxes.
Currently, Coinbase almost six million users, but less than 1,000 have declared their cryptocurrency activity.
Who will be affected by the court ruling?
Basically, anybody who has ever bought, sold, sent or received an amount bigger than $20,000 through their accounts in a single year, between 2013 and 2015, will be subject to this ruling and have their financial data shared with the IRS. We’re talking about names, date of birth, address, as well as taxpayer ID, plus complete records of all their account activity.
Coinbase estimates that their number will be somewhere around 14,355 individuals.
This final ruling is actually narrower that IRS’ original request, which wanted to see the activity of all six million users, during the above mentioned interval.
Like expected, the cryptocurrency community isn’t happy at all with this decision.
According to a report coming from The Verge, Peter Valkenburgh, from Coin Center, says that he expects “a similarly sweeping request could be made for customer data from any financial institution”, unless the IRS comes with a better justification about their interest about customer accounts.
Valkenburgh also added that this “sets a bad precedent for financial privacy”.
Users are not happy with what could come next
To wrap it up, this entire case emphasizes once again the need for improved tax reporting methods, focused on the cryptocurrency landscape. On the other side, it is well known that this is something which a lot of users, without any doubt, have been seriously hoping to avoid for as long as possible.