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United States v. Gratkowski

United States v. Gratkowski

United States Court of Appeals for the Fifth Circuit

June 30, 2020, Filed

No. 19-50492

Opinion

 [*309]  HAYNES, Circuit Judge:

Richard Gratkowski appeals the district court's denial of his motion to suppress evidence obtained through a search warrant. We AFFIRM.

I. Background

A. Factual Background

Gratkowski became the subject of a federal investigation when federal agents began investigating a child-pornography website (the "Website").1 To download material from the Website, some users, like Gratkowski, paid the Website in Bitcoin.

Bitcoin is a type of virtual currency. Each Bitcoin user has at least one "address," similar to a bank account number, that is a long string of letters and numbers. Bitcoin users [**2]  send Bitcoin to other users through these addresses using a private key function that authorizes the payments. To conduct Bitcoin transactions, Bitcoin users must either download Bitcoin's specialized software or use a virtual currency exchange, such as the one used here, called Coinbase.

When a Bitcoin user transfers Bitcoin to another address, the sender transmits a transaction announcement on Bitcoin's public network, known as a blockchain.2 The Bitcoin blockchain contains only the sender's address, the receiver's address, and the amount of Bitcoin transferred. The owners of the addresses are anonymous on the Bitcoin blockchain, but it is possible to discover the owner of a Bitcoin address by analyzing the blockchain.

For example, when an organization creates multiple Bitcoin addresses, it will often combine its Bitcoin addresses into a separate, central Bitcoin address (i.e., a "cluster"). It is possible to identify a "cluster" of Bitcoin addresses held by one organization by analyzing the Bitcoin blockchain's transaction history. [**3]  Open source tools and private software products can be used to analyze a transaction.

B. Procedural History

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964 F.3d 307 *; 2020 U.S. App. LEXIS 20501 **; 2020 WL 3530575

UNITED STATES OF AMERICA, Plaintiff - Appellee v. RICHARD NIKOLAI GRATKOWSKI, Defendant - Appellant

Prior History:  [**1] Appeal from the United States District Court for the Western District of Texas.

CORE TERMS

blockchain, records, users, transactions, Website, quotation, currency, marks, privacy interest, cell phone, privacy, bank records, third-party, transferred, reasonable expectation of privacy, motion to suppress, telephone

Criminal Law & Procedure, Standards of Review, De Novo Review, Conclusions of Law, Motions to Suppress, Clearly Erroneous Review, Findings of Fact, Constitutional Law, Fundamental Rights, Search & Seizure, Scope of Protection, Expectation of Privacy, Banking Law, Business & Corporate Compliance, Banking & Finance, Bank Activities, Commercial Banks, Anti-Money Laundering & Bank Secrecy, Types of Banks & Financial Institutions, Criminal Offenses, Money Laundering, Bank Secrecy Act