Cryptocurrency Advocates Push for Case Dropping Against Privacy-Focused Bitcoin Mixer Samourai
In the Spotlight
- Crypto supporters fight for dismissed case against Samourai Wallet developers
- Judge dismisses briefs from crypto advocacy groups
Get the ScoopTwo crypto advocacy groups, arguing alongside other organizations, call for the dismissal of the case against the Bitcoin mixer, Samourai Wallet. The group asserts that the software merely helps users make online financial transactions while adhering to U.S. laws. Privacy, they argue, is a standard part of everyday life, just like cash transactions.
Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill were arrested and the service shut down last year by the feds, who accuse the app of being an unlicensed money transmitter used by criminals. The developers contend that they only wrote the software, and it was the users who had control over their Bitcoin, not the developers themselves.
In their recent briefs, the DeFi Education Fund and the Blockchain Association argue that the money transmitting charge is invalid since prosecuting software developers who don’t control user funds doesn’t fit the meaning of the statute. They assert that FinCEN’s ruling dictates that an entity needs to have total independent control over the value to be considered a money transmitter.
Coin Center’s executive director Peter Van Valkenburgh also agrees that the defendants, who operated a coinjoin server, didn’t have a level of control over user funds that would merit treatment as a money transmitter.
Despite the outcry from crypto advocates, a federal judge recently denied the amicus curiae briefs related to the case.
Crypto mixing apps, like Samourai Wallet, have gained notoriety since U.S. authorities banned Americans from using the Ethereum-based Tornado Cash in 2022. Critics claimed that the platform was used to launder ill-gotten funds. The app’s co-founders, Roman Storm and Roman Semenov, are accused of laundering over $1 billion in criminal proceeds.
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References:2. U.S. Department of Justice allegation of Samourai Wallet as an unlicensed money transmitter3. Alleged crimes associated with the use of Samourai Wallet4. U.S. Department of Justice's ban on Americans using the Ethereum-based Tornado Cash5. Co-founders of Tornado Cash accused of laundering over $1 billion in criminal proceeds6. Brady rule concerns raised by Samourai Wallet's defense due to delayed disclosure of FinCEN communications
- Crypto advocacy groups, including the DeFi Education Fund and the Blockchain Association, are supporting the developers of Samourai Wallet, arguing that the app is a tool for financial transactions that upholds U.S. laws.
- The contention of Samourai Wallet's developers, Keonne Rodriguez and William Lonergan Hill, is that they only wrote the software, and users controlled their own Bitcoin, not the developers.
- In their briefs, these groups argue that the money transmitting charge is invalid because the developers didn't control user funds, aligning with FinCEN's ruling that an entity needs total independent control over the value to be considered a money transmitter.
- Coin Center’s executive director, Peter Van Valkenburgh, also supports this argument, asserting that the defendants, who operated a coinjoin server, didn’t have control over user funds that would merit treatment as a money transmitter.
- Despite the support from crypto advocates, a federal judge recently denied the amicus curiae briefs related to the case.
- The ongoing legal battle surrounding Samourai Wallet and other crypto mixing apps, like the Ethereum-based Tornado Cash, highlights the complex relationship between technology and regulation in the crypto industry.
