In a dramatic turn of events, lawyers representing Samourai Wallet have accused prosecutors of hiding key evidence in a case against the wallet’s co-founders, Keonne Rodriguez and William Lonergan Hill. The pair face charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business. The lawyers argue that the case should be dismissed due to alleged Brady violations—where prosecutors are required to share exculpatory evidence with the defense.
Alleged Suppression of Evidence
The crux of the defense’s argument lies in a communication from the Financial Crimes Enforcement Network (FinCEN) back in August 2023. According to this communication, under FinCEN guidelines, Samourai Wallet did not qualify as a money transmitting business and did not require a license. This information, which could have significantly influenced the legal proceedings, was allegedly withheld until April 1, 2025, when prosecutors finally disclosed it following a specific request from the defense. “The fact that FinCEN took the same position… and that the prosecutors nonetheless charged the Defendants… is shocking,” the defense asserted in their filing.
A Precedent of Dismissal
The defense leans heavily on the Brady v. Maryland case from 1963, where it was established that withholding exculpatory evidence violates a defendant’s due process rights. Such violations often lead to cases being dismissed, as seen in the high-profile case against actor Alec Baldwin last year—his manslaughter charges were dropped mid-trial for similar reasons. This echoes broader concerns in the crypto industry, as highlighted in Coinbase’s involvement in a Supreme Court case defending user data privacy against IRS demands.
Lawyers for Samourai Wallet argue that this oversight prejudiced the case against Rodriguez and Hill from the start. They claim that knowledge of FinCEN’s stance might have influenced bail decisions and allowed for earlier motions to dismiss, thus preventing Rodriguez from being confined to his home and both defendants from depleting their life savings in defense.
The Blanche Memo and Its Implications
Adding another layer to the defense’s case is the “Blanche Memo,” a directive from U.S. Deputy Attorney General Todd Blanche. This memo advises against prosecuting regulatory violations involving cryptocurrencies, specifically cases against exchanges or mixers for end-user actions. The defense has already invoked this memo in their plea to have the charges dropped. However, the Department of Justice has yet to reach a decision on this matter, despite a meeting with the defense nearly a month ago.
Should the DOJ refuse to dismiss the charges, the defense plans to file a motion on several grounds, including the assertion that Rodriguez and Hill were not money transmitters. Furthermore, they argue that even if the DOJ’s legal interpretation was correct, the defendants were not given fair notice, warranting dismissal. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance on staking.
The stakes are high, with the next hearing set for July 22, 2025. This delay continues to hang over the heads of Rodriguez and Hill, prolonging their legal and financial turmoil. Meanwhile, FinCEN has remained silent on the matter, declining to comment when approached by CoinDesk.
In the ever-evolving landscape of cryptocurrency regulation, this case underscores the tension between innovation and oversight. As legal battles unfold, the crypto community watches closely, aware that the outcomes here could set precedents impacting future regulatory approaches and enforcement actions. Whether Rodriguez and Hill will emerge from this legal quagmire unscathed remains to be seen. But one thing’s for sure: the implications of this case could ripple through the industry for years to come.
Source
This article is based on: Samourai Wallet’s Lawyers Say Prosecution Suppressed Critical Evidence, Call for Dismissal
Further Reading
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- Trump’s Crypto Sherpa Bo Hines Says Crypto Legislation on Target for Quick Completion
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.
