The U.S. government has secured a legal victory in its efforts to access crypto user data, with Coinbase at the heart of the case.
After years of legal proceedings, the courts have ruled in favor of the IRS, granting it access to certain Coinbase users’ transaction histories without a warrant. This decision raises ongoing questions about data privacy in the crypto space.
How It Started: IRS Targets Coinbase Users
The case began in 2020, when the IRS issued a “John Doe” summons to Coinbase requesting records for a large number of users. The stated aim was to identify U.S. taxpayers who may not have fully reported their cryptocurrency gains.
The IRS eventually limited its request to approximately 14,000 users, but the scope of the data remained broad — including transaction logs, login records, user profiles, and security settings. The move prompted concerns among some observers about the extent of government access to personal financial data.
One Coinbase user, James Harper, challenged the IRS’s actions in court. Supported by several advocacy groups, he argued that the data collection violated his Fourth Amendment rights, which protect against unreasonable searches and seizures.
Court Sides with IRS Despite Coinbase’s Opposition
Fast-forward to 2025, and the legal battle reached its peak. Coinbase filed an amicus brief with the U.S. Supreme Court, urging them to hear Harper’s case and to rethink the “third-party doctrine.” This outdated legal rule says that if you voluntarily give your data to a business (like Coinbase), it’s no longer protected by privacy laws.
In Coinbase’s view, the doctrine doesn’t hold up in the digital age. Just because you use an online service shouldn’t mean the government can rummage through your life without oversight.
However, the courts ruled in favor of the IRS. Early decisions concluded that the records held by Coinbase were considered business documents rather than personal ones. The First Circuit Court of Appeals upheld this interpretation, and unless the Supreme Court decides to take up the case, the ruling remains in effect.
JUST IN: 
Supreme Court rejects bid to shield Coinbase user data from IRS. pic.twitter.com/vOXIchSWZI
— Whale Insider (@WhaleInsider) June 30, 2025
How This Decision Affects Crypto Privacy
The ruling extends beyond a single individual’s records and may establish a significant legal precedent.
The ruling allows the IRS—and potentially other agencies—to request crypto-related data from service providers without directly notifying the individual.
Exchanges like Coinbase must comply — even if they disagree.
Under current legal interpretations, the government can access certain financial records without obtaining a warrant.
For cryptocurrency users concerned about privacy, the ruling highlights ongoing debates about data ownership and individual control in the digital age.
How Wallet Types Influence Your Security and Control
For those prioritizing privacy and self-custody in the crypto space, this development underscores an important point: without control of your own keys, your data may not be fully in your hands.
Centralized exchanges such as Coinbase operate within regulatory frameworks and may be required to share user data with authorities. This can include account activity, login history, and balances. In contrast, using a non-custodial wallet gives users greater control over their assets and data, with fewer intermediaries involved.
When using a self-custodial wallet, transaction history remains publicly visible on the blockchain, but linking those transactions to a real-world identity is more difficult without centralized records.
While it does not guarantee complete anonymity, it provides an additional level of privacy that centralized platforms typically cannot offer.
Best Self-Custody Wallet
With centralized risks growing harder to ignore, the time has come for people to put more faith in secure, self-custody solutions to have full control over their own assets.
Among the top options is Best Wallet, a non-custodial Web3 wallet that not only offers a way for users to store or swap cryptocurrencies, but also buy them using fiat – all without undergoing any identity verification process.
Its self-custody architecture entrusts private keys in the hands of users, while its adoption of Fireblocks offers a mix of accessibility and protection. Fireblocks insures all crypto assets held in the facility, and ensures that users don’t need to rely on passphrases to gain access to the wallet.
It is relatively easy to set up a Best Wallet account – all users have to do is simply download the app on the Google Play Store or Apple Store, create a wallet account with a valid email and password, and start exploring its features.
Best Wallet’s simple posture is complemented by a large variety of modern tools, further setting it apart from traditional self-custody wallets. First, it supports over 60 blockchains, including Bitcoin, Ethereum, Polygon, BNB Chain, and more, giving users the opportunity to buy over 1,000 assets without leaving the app.
Furthermore, users can find lucrative staking opportunities, unlock iGaming perks, and even gain access to some of the most promising cryptocurrencies while they are still at their zero stage.
Together, these standout features have made Best Wallet a strong contender for the best self-custody wallet to use in 2025.
Download Best Wallet
This article has been provided by one of our commercial partners and does not reflect Cryptonomist’s opinion. Please be aware our commercial partners may use affiliate programs to generate revenues through the links on this article.
