A court has likened Coinbase to a “traditional bank” in rejecting an appeal from a convicted child porn purchaser who appealed using the Fourth Amendment.
Three-judge panel has enacted that FBI agents who subpoenaed Coinbase records to show a man had borrowed Bitcoin to access child pornography did not overstep his Fourth Amendment rights.
They rejected the appeal of Richard Gratkowski, who was sentenced for receiving child pornography and accessing websites with the purpose to regard child pornography in May 2019 and was punished over 70 months in jail with 10 years of probation.
On June 30, the court correlated Coinbase to a traditional bank, illustrating the Supreme Court’s unified 1939 decision in United States v. Miller — this set up that bank records were not insured by the Fourth Amendment.
Judge Catharin Haynes stated “Coinbase is a financial institution, a virtual currency exchange, that provides Bitcoin users with a method for transferring Bitcoin,”
“The main difference between Coinbase and traditional banks, which were at issue in Miller, is that Coinbase deals with virtual currency while traditional banks deal with physical currency.”
Gratkowski pleas using Fourth Amendment
An FBI examination into a child pornography website had form that Gratkowski employed Bitcoin (BTC) to pay for its content between June 2016 and May 2017.
Gratkowski disputed his belief by asserting that data interesting Bitcoin transactions should be subject to the same protections as was awarded to cell-site location evidence in the Supreme Court’s 2018 Carpenter v. United States decision.
The panel of judges opposed Gratkowski’s argument, acknowledging that unlike cell-site location information, data concerning Bitcoin transactions do not include a “pervasive or insistent part of daily life” or provide “an intimate window into a person’s life.” The panel also emphasized the public nature of data transmitted via Bitcoin’s blockchain.
Judge Haynes stated “The nature of the information on the Bitcoin blockchain and the voluntariness of the exposure weigh heavily against finding a privacy interest in an individual’s information on the Bitcoin blockchain”.
During the trial of Ross Ulbricht, the founder of anonymous darknet marketplace Silk Road, Ulbricht unsuccessfully claimed that his prosecution violated the Fourth Amendment in its use of data in identifying him.
A recent academic paper titled ‘Transparency is the New Privacy: BLockchain’s Challenge for the Fourth Amendment, author Paul Belonick argues that the Fourth Amendment “rest[s] on physical-world analogies that do not hold in blockchain’s unique digital space.”
