The Swedish Tax Authority has demanded the full customer transaction history, specifically including customers’ wallet addresses, from the small Swedish bitcoin exchange BTC-X. This demand comes without any individual suspicion of crime, or indeed any suspicion of crime at all, even in general. As this would enable trackability of everybody’s financial past, present, and future, BTC-X is taking the Tax Authority to court over their demands.

Various authorities have long mistaken a right to demand tracking data in individual cases on concrete suspicion of a serious and committed crime for a right to throw a dragnet over tons of private data to see what sticks. However, the latest move by the Swedish Tax Authority is a new level of audacity – and a new level of mass violations of privacy.

The Swedish Tax Authority is demanding the transaction history for the 20,000 customers of the Swedish bitcoin exchange BTC-X. They, in turn, are fighting back and taking the Tax Authority to court over this demand. While the Tax Authority is doing its usual spin dance, claiming “it’s just routine” and “just a data snapshot”, not to mention “it’s lawful”, the truth is that this dataset would give the Tax Authority a horrifying level of trackability over everybody’s everyday finances – far beyond what has ever been asked for before.

It would not just be a snapshot. Due to the nature of bitcoin, if the Tax Authority wins in court and receives this data, they will have not just a snapshot of the present – they will also have full trackability into the past, and worse, full trackability of everybody’s financial data into the future – including all the things those people will do outside of that exchange in the future.

Will the courts understand this point? It’s crucial to understand the scale of the violation being committed. As we’ve stated before, bitcoin may be pseudonymous – but it provides for financial tracking that can be used for a dystopic society where the government knows of not just every cent or satoshi spent, but has a very good idea of who transacted it. The Swedish Tax Authority appears to be seeking the ability to create just that dystopic future.

Privacy remains your own responsibility, indeed.