Federal investigators are looking for tax evaders who have used virtual currencies like bitcoin to dodge the IRS.
The Justice Department says a federal court has given the IRS a green light to serve a summons on Coinbase, a San Francisco exchange for digital currency.
The Justice Department says it's looking for people who conducted transactions with Bitcoin from 2013 to 2015 and didn't pay tax on their gains.
Coinbase itself is not accused of wrongdoing, but it opposed the petition, citing privacy concerns.
"We look forward to opposing the DOJ's request in court after Coinbase is served with a subpoena," the exchange said in a statement. "As we previously stated, we remain concerned with our U.S. customers' legitimate privacy rights in the face of the government's sweeping request."
A spokesman said Coinbase had 3 million users at the end of last year, his most recent available figure.
Bitcoin was created in 2009 and is the best-known of the many digital currencies, which are not issued or regulated by any government. The worth is determined by the people buying and selling it. The digital markets have, at times, experienced wild fluctuations in value.
Digital currency is preferred by some people for its perceived anonymity, and it can be used for illegal purchases of drugs and other products. It's not necessarily as anonymous as cash because Bitcoin can leave a digital footprint allowing investigators to track online activity, like evading taxes.
--CNNMoney's Jose Pagliery contributed to this report.
