Coinbase Enters Elon Musk’s X in U.S. Supreme Court Battle for Digital Privacy

In a crucial moment, Coinbase joins Elon Musk’s X in requesting the Supreme Court to rein in the IRS’s bulk data acquisition, other states also entered this legal battle. This issue arose in 2017, Harper discovered that the IRS requested financial information from over 14,000 Coinbase users through a “John Doe” summons. He raised a complaint against this data violation under Fourth Amendment rights. This debate over digital privacy rights became an intense battle, and many challenged the unofficial power of the IRS over individual data. Let’s get into the legal details of this long battle. 

The Harper Case: A Catalyst for Legal Reform

James Harper’s story is one of a privacy breach. Without his knowledge, the IRS accessed his financial transactions through a sweeping summons aimed at unnamed individuals. This type of administrative summons, although legal since the 1970s, is now facing scrutiny in the digital age. With his lawsuit, Harper challenges whether it’s constitutional for the government to obtain private data without suspicion or notice. According to Coinbase’s Chief Legal Officer, Paul Grewal, the implications of the IRS’s actions go far beyond Harper’s individual experience. Coinbase joins Elon Musk’s X and others in supporting Harper’s position, emphasizing that modern users deserve the same protection for their digital accounts.

The third-party doctrine says that any time you voluntarily share info with a third party you have no reasonable expectation of privacy whatsoever. Today @coinbase filed an amicus brief with the US Supreme Court to right this wrong. 1/3

— paulgrewal.eth (@iampaulgrewal) April 30, 2025

Why Digital Privacy Rights Matter Now More Than Ever

In today’s online world, people share, store, and manage their lives digitally. This makes digital privacy privileges not just a legal issue, but a fundamental one. Platforms like Coinbase and X host an enormous amount of sensitive user data. The idea that this information can be accessed without direct consent or a warrant is troubling to many. As Coinbase joins Elon Musk’s X in fighting for reform, they’re essentially pushing back against outdated legal frameworks that don’t reflect today’s tech-driven lifestyle. These companies argue that digital records deserve higher privacy expectations, especially when governed by user agreements.

John Doe Summonses: IRS’s Bulk Data Collection Under Fire

The IRS’s data acquisition method using John Doe summonses is not new. But its application to crypto platforms is relatively recent and rapidly expanding. Legal experts note that such summonses have become a key IRS tactic in identifying users who may be underreporting crypto earnings. Coinbase, Kraken, and Circle have all been served these requests. Critics argue that this method casts too wide a net, compromising innocent users’ privacy along the way. By challenging this, Coinbase and its allies are not opposing tax enforcement but rather asking for it to be conducted under proper legal oversight.

Coinbase and X: Private Companies Taking a Public Stand

It’s not every day that tech giants and crypto companies unite over a constitutional issue. Yet, Coinbase joins Elon Musk’s X in showing rare solidarity to safeguard user interests. X filed its own brief stressing how unchecked government subpoenas could threaten user trust across platforms. Several state attorneys general have also backed this cause, emphasizing that fundamental rights must be protected even in the pursuit of tax compliance. Their collective stance highlights growing concern that, without legal checks, the government could set dangerous precedents in surveilling user activity across digital platforms.

A Defining Moment for Crypto Platform Users

If the Supreme Court decides to hear the case and sides with Harper, it could lead to sweeping changes in how government agencies interact with digital entities. It would mean that agencies like the IRS would need more than just a broad suspicion to access private records from any crypto platform. However, if the Court declines to hear it, the IRS’s bulk data collection methods could become more normalised, risking the erosion of digital privacy rights.