Today, in the Southern District of New York, was the first hearing in the US Department of Justice’s (DoJ) case against Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill.
I attended the first hearing for the #Samourai Wallet case earlier today on behalf of @BitcoinMagazine and briefly spoke with one of the defendants, Keonne Rodriguez, after the hearing.
Here's a recap of what I learned: pic.twitter.com/QZN4Ape0CZ
— Frank Corva (@frankcorva) May 28, 2024
The two developers were arrested in late April and charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.
Only Rodriguez and his attorney, Michael Krouse, were present in the courtroom today, though, as Hill is still in Portugal and has yet to respond to an extradition request from the US government.
The prosecution stated that it is nearly set to engage in discovery (sharing the evidence that it plans to use for the trial with the defendants) and that it is prepared for the trial whether both Hill and Rodriguez are present for it or not.
“Substantial Discovery”
The prosecution also stated that it has yet to extract all of the data from the electronic devices it has confiscated from Rodriguez, but that it will provide “substantial discovery” based on the information it has obtained thus far.
And it shared that it is still waiting on Rodriguez to turn over a 2 terabyte hard drive that the defendant still has in his possession.
[Editor’s note: The following two sentences were added on May 29, 2024, a day after the original publication of this article.] The defense’s turning over the hard drive is part of the process of the parties exchanging discovery in the case, which was ordered by the judge. There is no reason to believe that the device holds any incriminating information.
A Letter From Two Senators
Rodriguez’s attorney stated that he plans to file a motion to dismiss the indictment of his client and his client’s partner at Samourai, citing a letter that US Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) sent to Attorney General Merrick Garland in which the two politicians argued non-custodial crypto software can’t be a money transmitting service.
“We write to express our grave concerns regarding the U.S. Department of Justice’s (DOJ) recent policy arguments that dramatically expand the scope of the Federal prohibition on operating an unlicensed money transmitting business,” begins the letter.
“The DOJ’s unprecedented interpretation of this statute in the context of non-custodial crypto asset software services contradicts the clear intent of Congress and the authoritative guidance of the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This interpretation threatens to criminalize Americans offering non-custodial crypto asset software services,” Senators Lummis and Wyden added.
The letter also acknowledges that “non-custodial crypto service providers cannot be classified as money transmitter businesses because users of such services retain sole possession and control of their crypto assets.”
Moving Forward
The judge announced that Rodriguez would remain under house arrest and that the next hearing for the case would take place on September 4, 2024 at 11:30 AM EST.
Those interested in donating to the legal defense fund for the Samourai developers can do so via this fundraiser set up by the Bitcoin Policy Institute (BPI).
