US-based crypto advocacy group DeFi Education Fund (DEF) confirmed filing an amicus brief supporting the appeal against the 2017 court order directing Coinbase to furnish the Internal Revenue Service (IRS) data relating to over 14300 users. The decentralized finance (DeFi) advocacy group directed the US Court to weigh the unique blockchain technology’s features when examining the privacy rights of users under the lens of Fourth Amendment.
The crypto advocate revealed filing the amicus brief supporting the appeal lodged by James Harper before the First Circuit Court of Appeals. DEF filing on Friday, October 20, challenges the lower court decision granting the IRS unfettered access to the user’s transaction history. The appellant opposes the unchecked access the lower court granted the US government agency to examine the transaction history of crypto users from the exchange’s database.
Harper is among the 14355 users whose data the IRS sought from the crypto exchange Coinbase, citing the 2017 court order. The move triggered resistance and a stronger pursuit of digital privacy rights.
Revise Fourth Amendment to Align with Digital Technology
DEF submits that the Fourth Amendment is deficient and requires revision. Doing so is necessary to balance the investigative powers that law enforcement agencies exercise and the individual’s financial privacy rights in the digital age.
DEF urges the court to prioritize the preservation of the degree of individual privacy whenever the old precedents meet new technology. The amicus brief presents grounds for the courts to help restore the preservation of privacy that existed during the adoption of the Fourth Amendment.
DEF filing restates the Fourth Amendment spirit that seeks to entrench safeguarding people against the unreasonable searches or seizures orchestrated by the US government’s agencies. DEF cited the development in Carpenter v United States to illustrate that the Fourth Amendment seeks to cap the US government’s capability to seek data from third-party platforms such as Coinbase.
The advocacy group added that cryptocurrency-related transactions have unique traceability features on the public ledgers. This attribute makes it possible to link actual identities to the pseudonymous addresses. The traceability severely disoriented the livelihoods of the 14355 users whose data was sought from Coinbase.
DEF expounded that the request tabled by the government’s revenue agency implicated all transactions of the listed users. The impact exceeds the current scope and could involve political, religious, sexual, professional, and familial associations.
Resolve Power Imbalances to Safeguard Privacy in Decentralized Finance Ecosystem
The DEF’s amicus brief informs the appellate court that the subordinate court’s ruling granted the government unfettered access to the individual’s livelihoods. In particular, the government’s agency ultimately leveraged the orders to realize a detailed yet encyclopedic and effortless compilation of Harper and another 14354 victims.
The lobby group illustrated that the degree of insights realized by the IRS exceeds the levels attainable via conventional banking records. The DeFI Education Fund targets educating policymakers concerning the benefits attributed to the decentralized finance (DeFi) ecosystem. The lobby group’s mission extends to pursuing regulatory clarity for the DeFi ecosystem.
The crypto advocate informed the First Circuit Court that the final decision has ramifications beyond the Harper vs. Werfel and Internal Revenue Services case. In particular, it sets the precedent that other courts would readily uphold regarding digital-related privacy rights and redefines the law enforcement measures deployed across the United States.
DEF’s Pursuit of Users’ Privacy Rights
DEF’s amicus brief echoes its previous stance alongside blockchain privacy groups in a January petition to the US Congress to prioritize protecting privacy rights. DEF supported the letter penned by Fight for the Future to Congress, warning that incorrect power imbalances threatened to extinguish the creative space that software developers exercise.
The letter in January 2023 warned the new Congress to uphold the spirit of the First Amendment to safeguard the code, as speech is utilized by many technologies to guarantee privacy. DEF supported the letter’s argument that misguided regulatory and legislative actions violated privacy rights. The resulting power imbalances could hamper the end-to-end encryption and safeguarding of personal data.
The letter urged Congress to the need for online spaces beyond control exercised by a single party as such threatens to contravene the users’ privacy. In support of end-to-end encryption, DEF identified with the argument that coding guarantees privacy as a tool that gives users power over the online experience.