Feds Reject Claims of Withholding Key Evidence in Samourai Wallet Case
Feds Reject Suppression Claims in Samourai Wallet Lawsuit
Federal prosecutors have rejected claims that they had suppressed critical information in their current lawsuit against the co-founders of the privacy-focused crypto mixing platform Samourai Wallet. The defense had alleged that the government had withheld a Treasury Department opinion that suggested the platform would not require a FinCEN license.
Disclosure Schedule Was Met, Prosecutors Claim
In a May 9 letter to Manhattan federal court, the Department of Justice (DOJ) asserted that it shared “all known substantive communications” with the Treasury’s Financial Crimes Enforcement Network (FinCEN) well before trial. Prosecutors argued that the defendants had ample time—seven months—to make use of the material, dispensing with any need for a hearing on alleged late disclosure.
Informal Guidance, Not Binding Policy
The root of contention is found in an August 2023 meeting among the prosecutors and FinCEN staff. In court filings, FinCEN representatives had clarified informally with prosecutors that Samourai could not be considered a Money Services Business (MSB), given that the service does not take custody of user deposits.
However, the DOJ clarified that this was “informal, caveated opinion” by individual staff—not an agency determination. FinCEN, the DOJ went on, had not made a policy-level determination on the question.
Defense Argues for Case Dismissal
The defense, representing co-founders Keonne Rodriguez and William Hill, called up the FinCEN comments to argue that the pair never violated licensing laws. In April, they requested the judge throw out the case, citing a memo by DOJ Deputy Attorney General Todd Blanche discouraging the prosecution of mixers for inadvertent regulatory offenses.
Prosecutors downplayed the significance of the memo, stating that it has no legally binding authority and can’t be invoked to stop defendants from being prosecuted.
Charges and Next Steps
Rodriguez and Hill were indicted in February 2024 on conspiracy to operate an unlicensed money transmitting business and money laundering charges. Both have pleaded not guilty. The disposition of the defense’s suppression motions may affect the trajectory of the case as it moves toward trial.
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Feds Reject Claims of Withholding Key Evidence in Samourai Wallet Case
Feds Reject Suppression Claims in Samourai Wallet Lawsuit
Federal prosecutors have rejected claims that they had suppressed critical information in their current lawsuit against the co-founders of the privacy-focused crypto mixing platform Samourai Wallet. The defense had alleged that the government had withheld a Treasury Department opinion that suggested the platform would not require a FinCEN license.
Disclosure Schedule Was Met, Prosecutors Claim
In a May 9 letter to Manhattan federal court, the Department of Justice (DOJ) asserted that it shared “all known substantive communications” with the Treasury’s Financial Crimes Enforcement Network (FinCEN) well before trial. Prosecutors argued that the defendants had ample time—seven months—to make use of the material, dispensing with any need for a hearing on alleged late disclosure.
Informal Guidance, Not Binding Policy
The root of contention is found in an August 2023 meeting among the prosecutors and FinCEN staff. In court filings, FinCEN representatives had clarified informally with prosecutors that Samourai could not be considered a Money Services Business (MSB), given that the service does not take custody of user deposits.
However, the DOJ clarified that this was “informal, caveated opinion” by individual staff—not an agency determination. FinCEN, the DOJ went on, had not made a policy-level determination on the question.
Defense Argues for Case Dismissal
The defense, representing co-founders Keonne Rodriguez and William Hill, called up the FinCEN comments to argue that the pair never violated licensing laws. In April, they requested the judge throw out the case, citing a memo by DOJ Deputy Attorney General Todd Blanche discouraging the prosecution of mixers for inadvertent regulatory offenses.
Prosecutors downplayed the significance of the memo, stating that it has no legally binding authority and can’t be invoked to stop defendants from being prosecuted.
Charges and Next Steps
Rodriguez and Hill were indicted in February 2024 on conspiracy to operate an unlicensed money transmitting business and money laundering charges. Both have pleaded not guilty. The disposition of the defense’s suppression motions may affect the trajectory of the case as it moves toward trial.
Read More
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