Page 33 - TPA Journal November December2021

Further, Bitcoin users are unlikely to expect that the identities and currency transactions.
information published on the Bitcoin blockchain
will be kept private, thus undercutting their claim In that regard, the nature of the information and the
of a “legitimate expectation of privacy.” Granted, voluntariness of the exposure weigh heavily against
they enjoy a greater degree of privacy than those finding a privacy interest in Coinbase records.
who use other money-transfer means, but it is well First, Coinbase records are limited. Having access
known that each Bitcoin transaction is recorded in to Coinbase records does not provide agents with
a publicly available blockchain. Every Bitcoin user “an intimate window into a person’s life”; it
has access to the public Bitcoin blockchain and can provides only information about a person’s virtual
see every Bitcoin address and its respective currency transactions. Second, transacting Bitcoin
transfers. Due to this publicity, it is possible to through Coinbase or other virtual currency
determine the identities of Bitcoin address owners exchange institutions requires an “affirmative act
by analyzing the blockchain. Gratkowski thus on part of the user.” Bitcoin users have the option
lacked a privacy interest in his information on the to maintain a high level of privacy by transacting
Bitcoin blockchain. without a third-party intermediary. But that requires
technical expertise, so Bitcoin users may elect to
7 Because we hold that there is no privacy interest sacrifice some privacy by transacting through an
in information stored in the Bitcoin blockchain, intermediary such as Coinbase. Gratkowski thus
Gratkowski’s argument—that the federal agents’ lacked a privacy interest in the records of his
method of using a “powerful and sophisticated Bitcoin transactions on Coinbase.
software” to analyze the Bitcoin blockchain
intruded into a constitutionally protected area and For the foregoing reasons, we AFFIRM the district
violated the Fourth Amendment—lacks merit. court’s denial of Gratkowski’s motion to suppress.
There is no intrusion into a constitutionally
protected area because there is no constitutional U.S. v. Gratkowski, No. 19-50492, 5th Cir. June
privacy interest in the information on the 30, 2020.
blockchain. ****************************************
**************************
Gratkowski again cites Carpenter to support his
argument that he had a reasonable expectation of SEARCH & SEIZURE – REASONABLE
privacy in the Coinbase records that documented SUSPICION
his Bitcoin transactions. Like the Blockchain, we
hold that the Coinbase records are more akin to the Otha Ray Flowers, convicted of a federal gun
bank records in Miller than the CSLI in Carpenter. violation, appeals the denial of his motion to
suppress evidence as a violation of his Fourth
Coinbase is a financial institution, a virtual Amendment rights. The questions on appeal are
currency exchange, that provides Bitcoin users with whether Flowers and Jeremy Mayo were “seized”
a method for transferring Bitcoin. The main when five or six patrol cars parked behind and
difference between Coinbase and traditional banks, around Mayo’s Cadillac with their patrol lights
which were at issue in Miller, is that Coinbase deals flashing, and if they were seized, whether Officer
with virtual currency while traditional banks deal Stanton had reasonable suspicion to conduct a
with physical currency. But both are subject to the “Terry stop.” Under the circumstances of this case
Bank Secrecy Act as regulated financial and viewing the facts in the light most favorable to
institutions. Both keep records of customer the Government, assuming arguendo that these

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