IRS Requests Court to Dismiss Crypto Founder’s Appeal Over Bank Record Subpoena

IRS Asserts Legal Compliance in Obtaining Financial Records The U.S. Internal Revenue Service (IRS) has asked an appellate court to reject cryptocurrency founder Rowland Marcus Andrade’s request to overturn a subpoena for his bank records. The IRS maintains that it acted in accordance with the law and that Andrade was properly notified. Investigation into Andrade and His Company ABTC Corp The IRS stated that it is investigating ABTC Corporation for potential violations of financial reporting laws, specifically under the Bank Secrecy Act. As part of this probe, the agency also sought personal financial records of Rowland Marcus Andrade, the company’s founder. However, Andrade claims that the IRS failed to properly notify him about the subpoenas, allegedly violating the Right to Financial Privacy Act (RFPA). Subpoena Issuance and Legal Battle The case dates back to 2021, when the IRS launched its investigation into Andrade. In May 2023, the agency issued subpoenas to Bank of America and JPMorgan Chase, seeking Andrade’s and ABTC’s financial records. Andrade’s legal team discovered the subpoenas and requested copies from the IRS. Later, the IRS withdrew the original subpoenas and reissued them, this time with notices sent to Andrade’s firm. However, in October 2023, these notices were returned as undeliverable. In February 2024, Andrade filed a lawsuit in Texas, seeking to have the subpoenas invalidated, arguing that the IRS had violated financial privacy laws. District Court Ruling and Andrade’s Appeal In May 2024, the district court dismissed Andrade’s lawsuit, ruling that the IRS had complied with RFPA and that Andrade was properly notified when the second set of subpoenas was issued. The court also stated that the case was moot since the banks had already provided the requested records to the IRS. In August 2024, Andrade filed an appeal with the Fifth Circuit Court and sought an injunction to prevent the IRS from reviewing his bank records while the case was under appeal. IRS: Andrade Not Entitled to Compensation In a February 10 legal filing, the IRS and U.S. Department of Justice (DOJ) argued that the court lacks jurisdiction over the case because no formal legal action was initiated against the IRS in the original proceedings. “Since the IRS effectively complied with RFPA, Andrade is not entitled to damages or attorney fees, which are contingent on a violation of the law,” the IRS and DOJ stated in their latest filing.

The Fifth Circuit Court is now set to determine whether to accept Andrade’s appeal or uphold the district court’s ruling. Background: SEC vs. Andrade This legal dispute follows the 2020 charges filed by the U.S. Securities and Exchange Commission (SEC) against Andrade, who was then the CEO of NAC Foundation. The SEC accused him of conducting an unregistered securities offering through AML Bitcoin, a token promoted as a “new and improved version of Bitcoin,” which drew the attention of U.S. regulators.

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