Briefing
DOJ Contemplates Withdrawing Prosecution against Bitcoin Mixer's Founders
With the arrival of a crypto-friendly president, developers behind the debunked Bitcoin blender Samourai Wallet are optimistic their case will be dropped. In a recent letter addressed to the court, both prosecutors and defense attorneys are discussing a 16-day extension, as they deliberate over dismissing the case.
The optimism stems from the defendants' earlier plea to the U.S attorney for the Southern District of New York, urging them to drop the case following the disbandment of the U.S Department of Justice's crypto-dedicated enforcement team.
The DOJ has stated it would refrain from pursuing criminal charges against crypto mixers, except in cases of embezzlement, scams, rug pulls and hacks. Samourai Wallet, a wallet with a Bitcoin mixing service that federal authorities shut down last year, fits this category. However, it has garnered less attention than Tornado Cash, another similar app banned by U.S. authorities.
Criminals reportedly utilized Tornado Cash for laundering dirty money in 2022, leading to a prohibition on Americans using the service. The app's co-founders, Roman Storm and Roman Semenov, were accused of laundering over $1 billion in criminal proceeds. In response, America's largest crypto exchange, Coinbase, filed a lawsuit alleging the sanctioning of Tornado Cash was unjust. Privacy-focused politicians frequently advocated against what they perceived as an attack on civil liberties.
Although the United States Treasury delisted Tornado Cash from the list of parties sanctioned by the Office of Foreign Assets Control, a federal court recently barred the body from reimposing sanctions on it. Since President Donald Trump took office, the DOJ and the U.S Securities and Exchange Commission have dropped several high-profile cases against crypto firms, as Trump advocated for the industry throughout his campaign.
When contacted for comment, Rodriguez and Hill's legal team was unavailable.
Editor's Note: James Rubin
Daily Debrief Newsletter
- The Samourai Wallet developers, charged with creating a debunked Bitcoin blender, are hoping for their case to be dropped under the new crypto-friendly presidency.
- In court, both prosecution and defense are discussing a potential 16-day extension, with the possibility of dismissing the case.
- The Samourai Wallet, a wallet with a Bitcoin mixing service, falls within the DOJ's criteria of not pursuing charges against crypto mixers, except in cases of embezzlement, scams, rug pulls, and hacks.
- While Samourai Wallet was shut down last year, it has garnered less attention compared to Tornado Cash, another similar app that was banned by U.S. authorities for reportedly being used to launder dirty money in 2022.
- Tornado Cash's co-founders were accused of laundering over $1 billion in criminal proceeds, leading to a prohibition on Americans using the service.
- America's largest crypto exchange, Coinbase, filed a lawsuit alleging the sanctioning of Tornado Cash was unjust, with privacy-focused politicians frequently advocating against what they perceived as an attack on civil liberties.
- Although the United States Treasury delisted Tornado Cash from the list of parties sanctioned by the Office of Foreign Assets Control, a federal court recently barred the body from reimposing sanctions on it. This comes after President Donald Trump took office, during which the DOJ and the U.S Securities and Exchange Commission have dropped several high-profile cases against crypto firms, as Trump advocated for the industry throughout his campaign.
