Federal prosecutors have firmly rejected accusations of evidence suppression in their ongoing case against the co-founders of Samourai Wallet, a crypto mixing service. They insist that all pertinent communications with the Treasury Department were disclosed well ahead of trial timelines, aiming to quash claims of procedural impropriety.
Prosecutors Push Back
In a letter dated May 9 to a Manhattan federal court, prosecutors refuted calls for a hearing, asserting their compliance with evidence disclosure rules. “The defendants will have seven months to make use of the information before trial,” they emphasized, suggesting that further hearings were unnecessary. This response follows a request from Samourai’s co-founders, Keonne Rodriguez and William Hill, who argue that vital information was withheld past due dates.
The crux of the matter lies in a conversation between the prosecutors and officials from the Treasury’s Financial Crimes Enforcement Network (FinCEN), which occurred six months before charges were filed. In this discussion, FinCEN representatives conveyed that Samourai Wallet might not require a Money Services Business (MSB) license—a key point of contention in the case against Rodriguez and Hill.
A Question of Timing
Rodriguez and Hill, facing charges of conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy since February 2024, contend that this disclosure came too late. They were arrested in April of the same year, pleading not guilty to the accusations. Their legal defense hinges partly on the argument that FinCEN’s comments, which downplayed the need for an MSB license, were not disclosed in a timely manner.
Prosecutors, however, maintain they have “acted in good faith,” explaining that the FinCEN officials’ remarks were informal and represented personal opinions rather than official policy. Kevin O’Connor, chief of FinCEN’s Virtual Assets and Emerging Technology Section, and Lorena Valente from the Policy Division were both involved in these discussions. The prosecutors’ letter describes the dialogue as informal, suggesting it lacked the weight of a formal regulatory decision.
The Legal Landscape
The court is now tasked with navigating these complex waters. Against a backdrop of evolving crypto regulations, the case raises significant questions about the legal responsibilities of crypto mixers like Samourai. While FinCEN’s guidance appeared to suggest Samourai wasn’t operating as an MSB, the lack of a definitive policy stance leaves room for interpretation—complicating the legal narrative. This mirrors broader legislative debates, such as those anticipated in the U.S. Congress over crypto legislation this summer.
Adding another layer to this saga is a memo from Deputy Attorney General Todd Blanche, released in April. It intimated that the Justice Department might avoid prosecuting crypto mixers for unintentional regulatory violations. Yet, prosecutors argue this memo should not influence the court, citing its disclaimer that it doesn’t grant any enforceable rights.
Future Implications
As the case unfolds, it underscores the growing pains of regulatory frameworks trying to keep pace with crypto innovations. The outcome could set a precedent for how crypto mixers are treated under U.S. law, potentially impacting a wide array of digital asset services. This situation is reminiscent of other high-profile legal battles in the crypto space, such as Coinbase’s involvement in a Supreme Court case concerning user data.
The next phase of this legal battle is slated for later this year, with both sides preparing their arguments for trial. Meanwhile, the crypto community watches closely, aware that the verdict could ripple through the industry, influencing both regulatory approaches and business operations.
Will Samourai’s co-founders manage to dismiss the charges? Or will the prosecution’s narrative hold sway in court? As the trial date looms, these questions remain unanswered, reflecting the broader uncertainties facing the crypto sector in 2025.
Source
This article is based on: Feds deny late disclosure of evidence in Samourai Wallet case
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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.
