{"id":128652,"date":"2025-05-06T02:16:05","date_gmt":"2025-05-06T02:16:05","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=128652"},"modified":"2025-05-06T02:16:05","modified_gmt":"2025-05-06T02:16:05","slug":"samourai-wallet-says-feds-hid-advice-that-crypto-mixer-was-in-the-clear","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=128652","title":{"rendered":"Samourai Wallet says feds hid advice that crypto mixer was in the clear"},"content":{"rendered":"

Source: Cointelegraph.com NewsSamourai Wallet\u2019s lawyers allege federal prosecutors suppressed advice that the firm didn\u2019t need a license before they charged executives at the crypto mixing service months later.\u00a0
\nIn a May 5 letter to a Manhattan federal court, lawyers for Samourai co-founders Keonne Rodriguez and William Hill said prosecutors disclosed that the US Treasury Department\u2019s Financial Crimes Enforcement Network (FinCEN) representatives told them six months before they charged the pair \u201cthat under FinCEN\u2019s guidance, the Samourai Wallet app would not qualify as a \u2018Money Services Business\u2019 requiring a FinCEN license.\u201d
\n\u201cShockingly, six months later, the same prosecutors criminally charged Keonne Rodriguez and William Hill with operating just such a business without a FinCEN license,\u201d the lawyers added.
\nThe letter claimed that prosecutors were required to share their discussions with FinCEN over Samourai two weeks after they unsealed charges, making the deadline May 8 last year, but instead \u201csuppressed this information for over a year, disclosing it only on April 1, 2025.\u201d\u00a0
\nProsecutors charged Samourai CEO Rodriguez and its technology chief Hill with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy in February 2024, unsealing the charges and arresting the pair in April that year.\u00a0
\nSamourai\u2019s mixing service took crypto from multiple users and blended it together to hide its origins. The government alleged the platform helped with over $2 billion in illegal transactions and facilitated over $100 million worth of money laundering transactions from online black markets and scammers.
\nRodriguez and Hill both pleaded not guilty.
\nIn the letter, their lawyers said prosecutors shared details of a call with Kevin O\u2019Connor, chief of FinCEN\u2019s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Policy Division staffer Lorena Valente.
\nAccording to an email from one of the prosecutors summarizing the call, FinCEN said that \u201cbecause Samourai does not take \u2018custody\u2019 of the cryptocurrency by possessing the private keys to any addresses where the cryptocurrency is stored, that would strongly suggest that Samourai is NOT acting as an MSB [money services business].\u201d
\nAn excerpt of an email from prosecutor Andrew Chan said FinCEN \u201cdid not have a sense\u201d of what it would decide on Samourai. Source: CourtListenerThe email said O\u2019Connor and Valente agreed that the government could try to argue that Samourai functionally controlled the crypto, \u201cbut that has never been addressed in the guidance, and so it could be a difficult argument\u201d for prosecutors.
\nSamourai\u2019s lawyers asked the court for a hearing \u201cto determine the circumstances surrounding the Government\u2019s late disclosure\u201d and to administer a remedy.
\nSamourai to renew dismissal bid if case goes on
\nRodriguez and Hill\u2019s lawyers said that, using this latest information, they would again ask for the charges to be dismissed, arguing they lacked fair notice and \u201cunderstood they were acting lawfully.\u201d
\nRelated: US Treasury\u2019s OFAC can\u2019t restore Tornado Cash sanctions, judge rules\u00a0
\nProsecutors and Samourai asked the court for more time on April 28 to consider potentially dismissing the case after the Justice Department rolled back its crypto enforcement.
\nRodriguez and Hill bid to dismiss the case in early April, arguing it should be dropped as Deputy Attorney General Todd Blanche said in an April 7 memo that the Justice Department wouldn\u2019t prosecute crypto mixers for \u201cunwitting violations of regulations.\u201d\u00a0
\nIn the latest letter, their lawyers said if the government \u201cwere to resist the Blanche Memo\u2019s directive and push forward,\u201d then they would bid to dismiss as \u201cif they were not money transmitters under FinCEN\u2019s guidance, then they could not possibly be prosecuted for not having a license.\u201d
\nMagazine: Tornado Cash 2.0 \u2014 The race to build safe and legal coin mixers\u00a0Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"

Source: Cointelegraph.com NewsSamourai Wallet\u2019s lawyers allege federal prosecutors suppressed advice that the firm didn\u2019t need a license before they charged executives at the crypto mixing service months later.\u00a0 In a… <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/128652"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=128652"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/128652\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=128652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=128652"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=128652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}