Is bitcoin still anonymous? Coinbase to provide user account information to the IRS
Coinbase is dealing with some legal issues and some bitcoin users may not be as anonymous as they thought in first place . The popular bitcoin exchange company will have to give the information of 14,355 company users to the Internal Revenue Service (IRS). These are the users who received over $20,000 through Coinbase.
The IRS will have access to transaction records, after a California federal court ordered Coinbase to turn over account information related to these users. Coinbase previously challenged the request in court, filing a motion to block the IRS from accessing its accounts in December 2016.
Back in 2016, it was reported that the IRS targeted Coinbase and a federal judge ordered the exchange to disclose transaction records of users between January 2013 and December 2015. At that time, the IRS wanted the records of all Coinbase customers over the specified period of time. However, Coinbase claimed that this would have meant 500,000 customers.
Court approves access to data of only 14,355 Coinbase customers
This means that the number of customers for which the IRS gained access to data is much lower, at 14,355. Coinbase also seemed happy with the decision of the court, considering that more than 480,000 customers will not have their records accessed by the IRS.
David Farmer, Coinbase's director of communications, stated that:
The Big Question is if Bitcoin is still Anonymous?
There is a simple answer. Yes Bitcoin still remains Anonymous as it can be for 90% of people, for the rest just remember that there are plenty of cryptocurrency exchangers that do not require user name, birth, date, address and taxpayer ID.
You lose a bit more in commision taxes and exchange fees but it's the safest way to go for those that seek anonymity.
Reportedly, the information that the IRS will get now includes user name, birth, date, address and taxpayer ID. The IRS also demanded the records related to account activity and account statements. The IRS' focus on Coinbase's customers comes after the agency stated earlier this year that fewer than 1,000 US citizens have reported their bitcoin earnings each year.
This is not the only problem that Coinbase has recently faced. The cryptocurrency exchange was actually down for maintenance on Friday, after bitcoin prices increased to $11,000. This was the second time in a matter of one week when the site was not accessible, as Coinbase also became unavailable after an outage that prevented users from accessing their accounts.