Richard Gratkowski, convicted of purchasing and receiving child pornography, and accessing websites with an intent to access child porn, was sentenced to 70 months in prison and ten years of probation.
He has appealed against the FBI for accessing his Coinbase transaction history record, suggesting it violates his fourth amendment rights, which protects people from unreasonable searches and seizures by the government.
A three-judge panel, which oversaw the case, ruled against the convict's appeal and said that FBI accessing his Coinbase record to confirm he used bitcoin to buy child porn does not violate his fourth amendment right.
The court has likened Coinbase to a traditional bank in their verdict on the matter and referred to the unanimous 1939 decision in the United States v. Miller case, which ruled bank records are not protected under the fourth amendment.
Judge Catharina Haynes, who was overseeing the case, noted that the only difference between Coinbase and a traditional bank is that Coinbase offers services for virtual currencies while traditional bank deals with fiat. She said:
“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.”
The FBI, in their investigation in the child pornography case, found that the convicted Gratkowski used bitcoin to pay for child pornography between 2016 and 2017. When the federal agents analyzed the transaction data, it was associated with a wallet linked to Coinbase. The agents later searched Gratkowski's home and found a hard drive containing child pornography.
Silk Road Ross Ulbricht's Appeal Was Rejected
Gratkowski appealed against his conviction and said that his bitcoin records should be subjected to the same set of jurisdiction as it was shown with cell-site location information in the Supreme Court's 2018 Carpenter v. United States decision.
However, the judging panel disagreed with Gratkowski. Arguing that his case couldn't be seen in the same light as cell-site location, as his bitcoin transaction history did not invade his privacy, or give away aspects of his life that he had the right to keep private. The judge said,
“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.”
Gratkowski is not the first person to use the fourth amendment argument to protect their privacy. Before him, Silk Road founder – Ross Ulbricht – during his trial, also claimed that his prosecution violated his Fourth Amendment rights in its use of data in identifying him.