Advocates for cryptocurrency file an amicus brief to address Fourth Amendment privacy rights of users.

An amicus brief has been submitted in support of an appeal against the U.S. Internal Revenue Service regarding a 2017 court ruling that compelled Coinbase to provide data from more than 14,300 of its users.

The DeFi Education Fund (DEF), a cryptocurrency advocacy organization, is urging a U.S. court to consider the distinctive features of blockchain technology when assessing the privacy rights of cryptocurrency users under the Fourth Amendment of the U.S. Constitution.

On October 20, DEF submitted an amicus brief to the U.S. Court of Appeals for the First Circuit, endorsing James Harper’s appeal against the Internal Revenue Service (IRS). This is part of an ongoing effort to prevent the U.S. government from having unrestricted access to users’ transaction histories on cryptocurrency platforms.

Harper was one of 14,355 Coinbase users whose data was disclosed to the IRS as a result of a court order in 2017, sparking a battle for enhanced digital privacy rights.

DEF contends that the Fourth Amendment needs to be reevaluated to restore the balance between law enforcement’s investigatory powers and an individual’s right to financial privacy in the digital age.

“When established legal precedents intersect with emerging technologies, the courts must ensure the preservation of the level of privacy against government intrusion that existed when the Fourth Amendment was enacted.”

The Fourth Amendment of the U.S. Constitution safeguards individuals from unreasonable government searches and seizures.

Additionally, DEF referenced the Carpenter vs. United States case to argue that the Fourth Amendment limits the U.S. government’s ability to obtain data from third-party platforms like Coinbase.

The advocacy group further elucidated that, since cryptocurrency transactions are traceable on public ledgers, it’s possible to link real-world identities to their pseudonymous addresses.

This had far-reaching consequences for all 14,355 users involved in the Coinbase case, as DEF explained:

“The government’s request in this case therefore implicated every user’s every transaction, now and forever, including their ‘familial, political, professional, religious, and sexual associations.'”

“It provided the government with a comprehensive, effortlessly compiled summary of the lives of Harper and 14,354 others,” DEF emphasized.

This level of insight far surpasses what can be derived from conventional banking records, the advocacy group contended.

The mission of the DeFi Education Fund is to educate policymakers about the advantages of decentralized finance and to establish regulatory clarity for the DeFi ecosystem.

The final verdict in Harper vs. Werfel and Internal Revenue Services is anticipated to establish a precedent for digital privacy rights and law enforcement procedures in the United States.