The IRS Succeeds In Compelling Crypto Exchange To Disclose User Information

As the price of bitcoin leaps and lurches toward new highs, it seems fitting that the legal regime surrounding it and other virtual currencies is similarly unpredictable. With bitcoin edging its way into mainstream finance, and Coinbase, one of the world's largest exchanges of bitcoin and other cryptocurrencies, currently holding the top spot on Apple's free apps chart, U.S. regulators have begun to grapple with how to bring cryptocurrencies and those who use them into compliance with existing and new laws. Though some agencies, like the Securities and Exchange Commission, have chosen a soft entry into regulation by first issuing proactive guidance, others, including the Internal Revenue Service (IRS), have opted to go directly into enforcement actions. A recent decision by the U.S. District Court for the Northern District of California on these actions has brought issues of cryptocurrency account holders' privacy, anonymity and tax liability onto center stage.