Bitcoin is often believed to be an anomymous digital currency in some circles. A few years ago, this was more or less true, but with advances in modern data science, it is possible to conclude possible connections by linking addresses. Particularly at intersections with traditional systems such as online exchanges, the supposed anonymity becomes brittle - what remains is a half-way (unsafe) pseudonymity.
Without court order and prosecution
According to court records, the german police found traces to digital currency in the case of customers of the illegal drug onlineshop "Chemical Love". They supposedly paid with Bitcoin, whereby the police initiated a backward search.
What followed were requests by the police against the german platform Bitcoin.de - which were answered all too quickly. According to the reports, a telephone call was everything it took to convince the platform to provide the necessary data for the case, even though it is strictly forbidden by german law to pass along user associated data without a court order , according to Data Protection Officer Johannes Caspar.
Justified Interest?
As an explanation for the drastic advance of Bitcoin.de, the "trustful cooperation with various authorities" should be mentioned, according to a company spokesman.
Although bitcoin.de claims "legitimate interest" of the police, however, the following facts are food for thought: The police asked because of a certain bitcoin address with Bitcoin.de, which according to statements at Bitcoin.de should have been registered there. The platform researched itself, according to german magazine motherboard, and readily handed over the associated real name, place of residence, e-mail, telephone number, order quantities, bank connection, account movements, login history and IP addresses. But not only for this one address, but also for seven more. How's that for data protection?
Goodbyte to data protection laws
Many users report that their trust in Bitcoin.de was broken by this story. It is nevertheless understandable that cooperation with the authorities is essential for a functioning legal state. However, the all too easy hand-over of data by bitcoin.de without any valid prosecution or court order is bound to impose some hard to answer questions for the platform.
Should you go on using a platform that treats user data like this and readily breaches state law to comply with the police (the irony...)? Decide for yourself!
Source (german): https://netzpolitik.org/2017/bitcoin-de-gibt-nutzerdaten-an-polizei-weiter-auch-ohne-richterlichen-beschluss/