US Appeals Court Allows Warrantless Search of Blockchain, Exchange Data

A federal appeals court ruled public blockchain information and information stored on crypto exchanges do not provide a reasonable expectation of privacy under the Fourth Amendment.

AccessTimeIconJul 1, 2020 at 5:15 p.m. UTC
Updated Aug 19, 2021 at 2:53 a.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

A federal appeals court on Tuesday affirmed a lower court’s denial of a motion to suppress evidence in a case that hinged on whether the Fourth Amendment of the U.S. Constitution protects Bitcoin blockchain records from warrantless search and seizure.

  • The Fifth Circuit Court of Appeals in New Orleans rejected defendant Richard Gratkowski’s claims his blockchain and Coinbase-held bitcoin transaction records could not be used as evidence against him. Gratkowski, who was convicted and sentenced last year on child pornography charges, had paid for the material in bitcoin.
  • Gratkowski based his motion to suppress that evidence on the Fourth Amendment's prohibition of unreasonable search and seizure. He argued the government had violated his reasonable expectation of privacy in analyzing his Coinbase and on-chain transactions because it was done without a warrant.
  • But the court effectively found that agents did not need a warrant to search those records. The court said the public nature of bitcoin's permissionless blockchain undercuts any user's claims to a reasonable expectation of privacy.
  • “Granted, they enjoy a greater degree of privacy than those who use other money-transfer means, but it is well known that each bitcoin transaction is recorded in a publicly available blockchain,” the Fifth Circuit held.
  • The court was skeptical of Gratkowski's claims to privacy for his Coinbase records. He had compared those records to protected cell phone metadata, but the court said Gratkowski's Coinbase records (and the blockchain records) are "more akin to bank records," which are not protected under the Fourth Amendment.
  • “Coinbase deals with virtual currency while traditional banks deal with physical currency. But both are subject to the Bank Secrecy Act as regulated financial institutions,” the Fifth Circuit held.
  • That's because of the "third-party doctrine," said Drew Hinkes, a lawyer with Carlton Fields.
  • "If a person voluntarily gives information to a third party, makes no effort to protect that information and the third party has a legitimate reason to retain that information” then the party providing that information has no legitimate expectation of privacy over that information, and that information may be obtained from that third party without a warrant, said Hinkes.
  • The Fifth Circuit affirmed the lower court's decision to deny Gratkowski's motion to suppress the evidence.
  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.