The intersection of cryptocurrency and privacy rights took center stage this week as the nonprofit DeFi Education Fund (DEF) implored a U.S. appeals court to consider the unique aspects of blockchain technology.
In an amicus brief filed on October 20th, DEF urged the First Circuit Court of Appeals to protect the digital privacy of cryptocurrency users under the Fourth Amendment. The case concerns a dispute between the Internal Revenue Service (IRS) and oinbase">Coinbase user James Harper, one of over 14,000 individuals whose data was handed to tax authorities in 2017.
DEF contended that the Fourth Amendment precedent must be re-examined for the digital age, arguing that unfettered government access to crypto transaction histories amounts to an unconstitutional invasion of privacy. The advocacy group pointed to the Supreme Court case Carpenter v. United States, which limited authorities’ access to cell phone data. DEF argues this same principle should extend to blockchain activity, given the ability to connect real-world identities to pseudonymous wallet addresses.
In a key excerpt from the filing, DEF warned that the IRS summons provided an “encyclopedic” view of crypto users’ entire financial lives, far beyond what is attainable from traditional bank records. With censorship resistance and anonymity being core tenets of cryptocurrency, the privacy implications span far beyond just financial transactions.
How the First Circuit Court of Appeals ultimately rules on this case could set an important precedent on the extent of constitutional protections for crypto users. The outcome may shape the ever-evolving balance between transparency on public blockchains and individuals’ rights to control their own data.
#Cryptocurrency #Privacy #FourthAmendment #Legal #Blockchain
