“It is clear overreach on the part of the government to force citizens to spy on each other without a warrant,” states a Coin Center statement released Friday.
The document, signed by the group of specialists that defends the policies around Bitcoin, outlines the reasons why they are suing the US Department of the Treasury.who last summer approved a regulatory measure for people and companies that use cryptocurrencies.
Specifically, an amendment to section 6050I of the Tax Code, which is part of the Jobs and Infrastructure Investment Act, was introduced. This amendment will require individuals and companies that receive more than USD 10,000 in cryptocurrencies as bitcoin to report to the government the name of the person who sent them money, their social security number and their date of birth.
“Are you an artist selling a painting or an NFT for $15k? You must file a form informing the government of your customer’s personal information. Are you a non-profit organization that receives anonymous donations for your humanitarian work? No more. You may have to give the government a list of your donors.”
Coin Center.
According to the plaintiffs, This requirement is “unconstitutional” and represents an affront to “civil liberties that must be challenged in the only way possible at this time: in court.”
Basic rights of bitcoiners violated
The terms of the lawsuit filed by Coin Center are concentrated in two points. The first assumes that “forcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment.”
The second point alleges that “requiring politically active organizations to create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment,” according to the statement cited.
The plaintiffs note that the Fourth Amendment, established as protection against arbitrary searches and seizures, already has important exceptions that limit privacy. For example, the “third party doctrine”. This establishes that if someone gives private information to a bank or a social media company they lose their right to prevent others from searching for that information without a court order.
“Provision 6050I is not even intended to collect information from “third parties”; requires people who are directly involved in a transaction that occurs without banks or other intermediaries to report about themselves and the people they pay or are paid by. (…) If the government wants us to report directly on us and the people with whom we carry out transactions, it must show before a judge that it has reasonable suspicions that justify a search of our private documents.”
Coin Center.
Coin Center’s second claim focuses on the possibility that the Treasury Department’s measure violates people’s freedom of association.
for this organization it is concerning that provision 6050I may require civil liberties groups to report their membership lists, as it could contribute to people being “afraid” to join these organizations and speak out on the issues they advocate for, “if their names were immediately reported to a potentially corrupt police authority.”
Institutions that oppose the use of Bitcoin
The lawsuit is primarily directed at Treasury Secretary Janet Yellen and IRS Chief Charles Retting. These two people contrast each other, according to their statements and positions towards Bitcoin.
To cite an example, last year Charles Retting asked Congress for more authority to regulate the cryptocurrency market. According to your statements “most cryptocurrencies are designed to stay under the radar screen”. These statements were released just as Amendment 6050I was being promoted.
For its part, Yellen has been changing its position regarding Bitcoin and recognize its benefits. However, his stance on stablecoins is more critical today, after the crisis around Terra. These warnings were also released by the US Federal Reserve.