Coinbase (COIN) filed a brief in the U.S. Supreme Court case involving an Internal Revenue Service request for data

Coinbase (COIN) on Wednesday argued in a brief that the Supreme Court should “intervene to protect Americans’ privacy interests in digital information stored by third-party service providers.”

The San Francisco-based cryptocurrency exchange was battling an Internal Revenue Service request for data on hundreds of thousands of its customers back in 2016. The U.S. tax agency was seeking to collect the records under the theory that once individuals shared their information with a third party—in this case, Coinbase—the institution could demand the data.

At the time, the exchange fought to narrow the request through court battles and eventually was compelled to deliver a much narrower scope of data.

“The court should intervene to clarify that the third-party doctrine does not allow the IRS to conduct dragnet searches,” Coinbase contended in its amicus brief filed in the case that has wide privacy implications.

In 2020, one of the customers, James Harper, a Bitcoin (BTC) researcher, filed a lawsuit against the IRS, which is now being argued before the high court.

"User anonymity vanishes—and the blockchain becomes susceptible to easy surveillance—when the government acquires information that allows it to match a public key or wallet address to a user's identity," Coinbase stated.

“This John Doe summons invaded a sphere in which over 14,000 Americans had a reasonable expectation of privacy against a warrantless IRS trawl for extensive personal and financial information,” the company argued.

Representing the government's case, the Department of Justice argued that "a person lacks a reasonable expectation of privacy in information voluntarily provided to a third party, including bank records pertaining to him."