Cryptocurrency advocacy organization Coin Center sues the U.S. Treasury Department! Alleges infrastructure bill is unconstitutional, violates privacy and freedom of association.

The non-profit organization Coin Center, which focuses on cryptocurrency policy, filed a lawsuit against the Treasury Department in a U.S. federal district court today, challenging the constitutionality of the amendment to Section 6050I of the tax code passed in the federal Senate last August as part of the infrastructure bill.

Coin Center Files Lawsuit Against Infrastructure Bill

According to a statement by Coin Center, they believe that the 6050I amendment in the infrastructure bill is unconstitutional on its face and cannot be fixed through regulation. This amendment requires individuals or businesses receiving over $10,000 in cryptocurrency to report to the government not only the source of the funds but also details such as date of birth and Social Security number.

"Are you an artist selling NFTs for $15,000? You must fill out a form disclosing personal information about your customers to the government. Are you a humanitarian organization accepting anonymous donations for your work? Not anymore, you must provide the government with a list of donors." Coin Center stated.

Two Key Arguments in Lawsuit

Coin Center argues that this is an affront to civil liberties that must be challenged in court, based on the following two key arguments:

1. Requiring individuals to collect highly invasive information about others and report it to the government without a warrant violates the Fourth Amendment of the U.S. Constitution.
2. Requiring politically active organizations to list and report the names and identities of their donors to the government violates the First Amendment of the U.S. Constitution.

Coin Center asserts that the first argument is about privacy, as the Fourth Amendment protects against unreasonable searches and seizures. However, there have been exceptions to the Fourth Amendment that have eroded privacy, such as the third-party doctrine in U.S. law, where once private information is provided to a bank or social media company, the U.S. government can access it from the third party without a warrant based on a "reasonable expectation of privacy."

However, the 6050I provision is not even about collecting information from a "third party"; it requires individuals involved in transactions without a bank or other intermediary to report their own and the counterparty's information.

The second argument concerns freedom of association, with Coin Center citing the example of Alabama in the 1950s requiring civil rights groups like the NAACP to report their membership lists. The Supreme Court ruled that the government could not compel these organizations to hold or submit such lists, reasoning that people would be deterred from joining these groups if their names were known to corrupt police authorities, thus hindering their ability to contribute and speak out on the important issues they advocate for.

The 6050I provision could potentially require civil liberty organizations like Coin Center to list and report information about their supporters, allowing the government to monitor a broader range of expressive activities and potentially chilling people's willingness to engage in political association.

"Even if it takes us to the Supreme Court, we intend to win this challenge. Thank you to the crypto community and supporters for backing our work. We will keep you informed as the case progresses." Coin Center stated.