A U.S. court classified Coinbase as a traditional bank after the exchange revealed its customer information at the request of the FBI. This decision was made when considering the appeal of Richard Gratkowski, sentenced to 5 years and 10 months in prison for the purchase of prohibited pornographic materials involving minors, reports Cointelegraph.
Earlier, the FBI found out that between June 2016 and May 2017, Richard Gratkovsky used bitcoins to purchase illegal content. Having installed the wallets used by him, the agency turned to Coinbase with a request to disclose information about this client. The exchange complied with еру requirement without a court order.
Having learned the address of Gratkowski, the FBI searched his house and found a hard drive with prohibited materials. During the trial, he challenged the allegations, referring to the Fourth Amendment of the Constitution. According to it, transactions involving Bitcoin should be protected in the same way as information about the location of a mobile phone.
However, the court concluded that cryptocurrency is not an integral part of everyday life, noting that the transparency of the Bitcoin blockchain greatly affects the privacy of its users.
“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,” Judge Haynes concluded.
The court also decided that Coinbase is the same financial institution as traditional banks. The only difference is that the exchange works with virtual currencies, and banks – with physical ones.
“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.”
Earlier it was reported that the Drug Enforcement Administration (DEA) and the United States Internal Revenue Service are interested in buying blockchain analytics software developed by Coinbase