At a time when the IRS is trying to find out the identities behind bitcoin users, the Pennsylvania Allegheny County District Attorney’s office revealed it had to use bitcoin to pay a ransom to get its data back.
According to a report by Forbes, the ransom was only $1,400, but the fact that a government agency paid a ransom and used bitcoin is something not seen before. The report quipped that Coinbase users would likely happily pay a ransom to prevent the IRS from finding out their identities and thus auditing them.
Earlier this month, the IRS got approval from a federal court in California to collect two years of information from Coinbase, the blockchain company, about its American users. According to a report by Reuters, which cited the U.S. Department of Justice, the Northern District of California court is allowing the IRS to serve a summons to Coinbase for U.S. taxpayers who engaged in virtual currency transactions using the Coinbase platform from 2013 to 2015.
The ruling didn’t sit well with Coinbase, which told Reuters: “We look forward to opposing the DOJ’s request in court after Coinbase is served with a subpoena.” Last month, news broke that the IRS is actively looking for bitcoin-based tax evasion. According to documents filed in November, the tax agency is fiercely going after tax evaders, both big and small, who are using bitcoin-based transactions in an attempt to hide funds by simple not reporting them. The Forbes report noted that the data attack on the District Attorney’s office in Pennsylvania could be payback for the IRS’ actions.