Bitcoin investor sues irs for its unlawful seizure of financial records of crypto exchanges.

jim bell jdb10987 at
Thu Jul 16 13:14:54 PDT 2020

Bitcoin Investor Sues IRS for Unlawful Seizure of Financial Records at 3 Crypto Exchanges
Bitcoin investor Jim Harper has sued the U.S. Internal Revenue Service (IRS), its commissioner, and a number of federal agents. He alleged that they unlawfully seized his private financial information from three cryptocurrency exchanges.Bitcoin Investor vs. IRS
Bitcoin investor Jim Harper has filed a lawsuit against IRS Commissioner Charles P. Rettig, the IRS, and “John Doe IRS Agents 1-10.” The latter refers to “fictitious names for the person or persons who authorized and conducted the search” of his private financial records, according to the court document filed on July 15 with the District Court for the District of New Hampshire. A jury trial is demanded.

The document outlines three counts of violations. The first is a “violation of the Fourth Amendment of the U.S. Constitution” as “the defendants conducted an unlawful search and seizure” of the plaintiff’s private financial information. The second is a violation of the Fifth Amendment as “the defendants violated due process protections in seizing” the plaintiff’s private financial information. The third is a violation of 15 U.S.C. § 7609(f) as the defendants obtained the plaintiff’s “financial records through an unlawful John Doe subpoena.”

The complaint detailed that Harper opened an account with Coinbase in 2013. He stopped accumulating new bitcoin and began liquidating his investments at Coinbase and transferred his remaining holdings to a hardware wallet in 2015. By early 2016, he no longer had any bitcoin at Coinbase. From 2016, he liquidated his bitcoin through either Abra or Uphold exchanges. He claimed to have properly declared and paid all applicable taxes on his bitcoin gains.

The IRS filed the infamous ex parte “John Doe” administrative summons on Coinbase in 2016, seeking information on U.S. persons who conducted crypto transactions between Jan. 1, 2013, and Dec. 31, 2015. Coinbase protested and the IRS narrowed its demand, seeking instead information regarding accounts with at least the equivalent of $20,000 in crypto transactions in any one year during the above period. When the exchange refused to comply, the IRS petitioned to enforce the summons against Coinbase. According to Coinbase, this means information on 8.9 million transactions and 14,355 account holders.

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