Cryptocurrency advocacy group, the DeFi Education Fund (DEF), has taken a significant step in the ongoing battle to protect the privacy rights of cryptocurrency users in the United States.
The Battle against IRS access to Cryptocurrency data
DEF recently filed an amicus brief with the U.S. Court of Appeals for the First Circuit, pitching its support behind James Harper’s appeal against the Internal Revenue Service (IRS). This appeal is part of a broader effort to prevent the U.S. government from gaining unrestricted access to cryptocurrency transaction histories, considering the unique features of blockchain technology.
Harper found himself caught up in a privacy rights dispute after his data, along with that of 14,355 other Coinbase users, was handed over to the IRS in 2017 following a court order. This incident sparked a controversy over the need for enhanced digital privacy rights.
DEF’s argument hinges on the idea that the Fourth Amendment of the U.S. Constitution, which safeguards individuals from unreasonable searches and seizures by the government, should be adapted to accommodate the digital age. They claim that when outdated legal patterns intersect with new technology, the courts must preserve privacy rights against government intrusion.
DEF’s fight for enhanced P+privacy rights
Furthermore, DEF gathered the case of Carpenter vs. United States to support their argument. They maintained that the Fourth Amendment seeks to limit the government’s ability to access data from third-party platforms, such as Coinbase.
With cryptocurrency transactions being traceable on public ledgers, linking real identities to pseudonymous addresses becomes feasible. This not only threatens user privacy but also has far-reaching consequences on individuals’ personal and professional lives, including their associations and activities.
DEF highlighted the comprehensive nature of the government’s request, stating that it provided a detailed and comprehensive overview of the lives of Harper and the other 14,354 users involved in the Coinbase case.
The DeFi Education Fund, its mission is to educate policymakers about the advantages of decentralized finance and to establish regulatory clarity for the DeFi ecosystem, amid an ongoing legal battle. The result of the Harper vs. Werfel and IRS case is expected to establish a model that will significantly impact digital privacy rights and law enforcement actions in the United States.