Samourai Wallet, a prominent player in the cryptocurrency privacy sphere, finds itself embroiled in a legal maelstrom after revelations that federal prosecutors allegedly concealed key advice from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The disclosure could potentially alter the trajectory of the case against Samourai’s co-founders, Keonne Rodriguez and William Hill, who were charged last year with operating an unlicensed money transmitting business.
The Hidden Guidance and Its Implications
In a dramatic turn of events, Samourai’s legal team has asserted that FinCEN had informed the prosecutors that Samourai Wallet did not require a license under their guidance. This revelation, according to a court letter dated May 5, 2025, underscores a critical oversight—or deliberate omission—by the prosecution. Lawyers for Rodriguez and Hill argue this guidance was withheld for over a year, only coming to light on April 1, 2025. “Shockingly, six months later, the same prosecutors criminally charged Keonne Rodriguez and William Hill with operating just such a business without a FinCEN license,” the letter stated.
The charges, initially brought in February 2024 and unsealed two months later, accused the duo of facilitating over $2 billion in illicit transactions through their crypto mixing service. This service, which obscures the origins of cryptocurrency by blending it with others, allegedly facilitated over $100 million in money laundering transactions linked to online black markets. Both Rodriguez and Hill have pleaded not guilty, maintaining their operations were lawful under the existing FinCEN guidance.
Legal Repercussions and the Path Forward
The new details have prompted Samourai’s legal team to request a court hearing to explore the late disclosure’s circumstances and seek appropriate remedies. According to an email from one of the prosecutors, Andrew Chan, FinCEN representatives had remarked that because Samourai did not take custody of the cryptocurrency—lacking control over the private keys—it strongly suggested that Samourai did not function as a Money Services Business (MSB).
Kevin O’Connor, chief of FinCEN’s Virtual Assets and Emerging Technology Section, alongside Policy Division staffer Lorena Valente, concurred that while the government could argue Samourai functionally controlled the crypto, such a position had not been formally addressed in guidance, potentially complicating the prosecution’s case. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
This revelation has fueled Samourai’s intention to renew their bid for dismissal of the charges. Their lawyers argue that without clear guidance, the founders lacked fair notice of any wrongdoing, bolstered by Deputy Attorney General Todd Blanche’s memo from April 2025, which discouraged prosecuting crypto mixers for “unwitting violations of regulations.”
Broader Implications for the Crypto Industry
The case against Samourai Wallet is a bellwether for the cryptocurrency industry, reflecting the regulatory uncertainty that continues to shadow crypto operations. The Justice Department’s recent rollback on crypto enforcement introduces further complexity, as the sector grapples with evolving compliance standards and regulatory expectations. The ongoing legal battle raises critical questions about the future of crypto privacy tools and their place within the regulatory framework. This follows a pattern of regulatory introspection, as seen in the UK’s FCA seeking public and industry views on crypto regulation.
The outcome of this case could set a precedent for how similar services are treated under U.S. law. Should Rodriguez and Hill succeed in their dismissal bid, it could embolden other crypto mixing services, reinforcing arguments for their legality under specific conditions.
As the court weighs the latest revelations, the crypto community watches closely. The resolution—or lack thereof—could reshape the legal landscape for cryptocurrency mixers, highlighting the delicate balance between privacy and compliance. The looming question remains: will regulators and innovators find common ground, or will the tug-of-war persist, leaving the industry in a state of flux?
As the situation unfolds, the crypto world remains on edge, eagerly anticipating how this legal drama will conclude and what it portends for the future of digital privacy tools.
Source
This article is based on: Samourai Wallet says feds hid advice that crypto mixer was in the clear
Further Reading
Deepen your understanding with these related articles:
- U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer (openai)
- ‘Huge Shift’ in crypto firms’ compliance mindset, says Elliptic co-founder
- Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
