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Crypto Case Drama: Will Samourai Wallet Founders Escape the Money Laundering Noose?

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Well, well, well, looks like Samourai Wallet’s co-founders, Keonne Rodriguez and William Hill, have called in the big guns to fight back! Their legal team is asking for the criminal charges to be thrown out the window, citing a juicy little piece of FinCEN guidance that flat-out contradicts the prosecutors’ claims. Plus, there’s a shiny new Justice Department policy that’s all about discouraging the “regulation by prosecution” approach in the crypto world. Fancy that, huh? 😏

Legal Battle Gets Juicy as Samourai Founders Throw Brady Violations Into the Mix

Hold onto your seats, folks, because in a recent court filing dated May 5, the defense attorneys revealed that, surprise surprise, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) had dropped a bombshell back in August 2023. Turns out, Samourai Wallet probably didn’t qualify as a licensed money transmitter under FinCEN’s regulations. Who knew? 🤔

Despite this, the Southern District of New York (SDNY) charged Rodriguez and Hill in April 2024 with conspiracy to commit money laundering and running an unlicensed money transmission business. They were accused of facilitating a whopping $2 billion in illicit transactions over the course of nine years. Talk about a big number, eh? 💸

But wait, there’s more! The defense claims the prosecution broke the rules in a big way by withholding FinCEN’s guidance for over a year. It wasn’t until April 1, 2025, after a special request, that this golden nugget was revealed. This, folks, is what we call a Brady violation—an obligation for the prosecution to share exculpatory evidence with the defense, according to the 1963 Supreme Court case Brady v. Maryland. If that sounds like a big deal, that’s because it is. And if evidence is withheld, sanctions could follow, even case dismissal! 🎭

And here’s the kicker—internal emails show that FinCEN officials were all like, “Hey, Samourai’s non-custodial model, where users hold their own private keys, suggests that it’s NOT a money services business (MSB).” Imagine that! According to the defense team, this is a game-changer. 📧

The plot thickened after an April 7, 2025, memo from Deputy Attorney General Todd Blanche. In it, he basically told prosecutors to back off when it comes to “superimposing regulatory frameworks” on crypto projects. The policy specifically tells them not to charge mixing services like Samourai for licensing violations or user misconduct—yeah, the very things this case hinges on. Oh, sweet irony. 😎

So far, the prosecution hasn’t said a peep about the defense’s April 10 request to dismiss the case, filed right after Blanche’s memo dropped. The defense claims the delay in receiving FinCEN’s disclosure seriously hurt their clients, possibly affecting bail decisions and putting Rodriguez on home detention, not to mention making it harder for them to access legal funds. That’s a tough break. 🏚️

Rodriguez and Hill have always insisted that they were in full compliance with FinCEN’s 2014 and 2019 guidelines, which basically give a pass to non-custodial crypto tools when it comes to MSB licensing. And if you believe Rodriguez’s public statements from 2021–2022, he was practically waving these guidelines around like a flag in defense of Samourai’s operations. 🏴‍☠️

There’s a hearing coming up to discuss the whole Brady disclosure issue and what to do about it. If the case gets dismissed, well, that could set a precedent that might make it harder for prosecutors to go after crypto developers with the same old financial laws. Watch this space, folks. 🧐

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2025-05-05 23:32

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