Samourai Wallet founder Keonne Rodriguez was denied changes to his bail conditions in a Southern District Court of New York hearing on charges of operating an unlicensed money transmitter.
Lawyers for the prosecution successfully argued that the privacy dev should remain under house arrest, after presenting evidence including handwritten notes detailing his “bug out prep.”
The notes detailed plans to pack a bag with passports, $10,000 cash, a burner phone and laptop, encrypted USB sticks and mnemonic seed phrases securing “as much Bitcoin as possible.”
A separate note appeared to detail travel plans from Miami to Cuba or the United Kingdom via Jamaica, stopping at “shitty gas stations” and using “cash only.”
Rodriguez’s lawyer argued that the notes were part of a general emergency plan, while the prosecution claimed that they pertained to an active escape plan on Rodriguez’s part.
Samourai Wallet and privacy
Rodriguez and his co-founder William Lonergan Hill were arrested in April and charged with operating what prosecutors call “a cryptocurrency mixer that executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets.”
Samourai Wallet is a non-custodial app that enables users to store Bitcoin privately, as well as functioning as a coin mixer that obfuscates transactions by combining them, making movements harder to trace.
Lawyers for Hill and Rodriguez have cited a May 2024 letter from Sens. Cynthia Lummis (R-WY) and Ron Wyden (D-OR) accusing the Department of Justice (DOJ) of overreach in its interpretation of non-custodial crypto asset software services as “unlicensed money transmitting businesses.”
In the letter, Lummis and Wyden argue that, “At no point when operating or providing non-custodial services do such service providers "accept" crypto assets from their users,” and that the DOJ has contradicted guidance from FinCEN. “It is very concerning that DOJ would adopt an interpretation of this registration requirement that is contrary to another Federal agency,” the pair wrote.
Edited by Stacy Elliott.