Samourai Wallet Files to Dismiss DOJ Case, Citing FinCEN Guidance
Samourai Wallet co-founders Keonne Rodriguez and William Hill are challenging U.S. government criminal charges in a Manhattan federal court. Their joint motion seeks dismissal of the indictment, arguing the Department of Justice (DOJ) case contradicts long-standing Treasury Department policy and risks criminalizing open-source software.
The charges allege operating an unlicensed money transmitting business and conspiracy to commit money laundering. The defense contends Samourai Wallet, a Bitcoin privacy app, never handled user funds and therefore shouldn’t be classified as a financial institution or money transmitter. The core issue centers on the distinction between custodial and non-custodial services. Custodial services control customer assets, while non-custodial tools, like Samourai, facilitate privacy-enhancing transactions without controlling the assets. The app uses CoinJoin, a method to obscure blockchain transactions.
The motion emphasizes that Samourai users always retained control of their cryptocurrency; the app merely coordinated privacy-enhancing transactions. The defense cites the Financial Crimes Enforcement Network (FinCEN)’s long-standing guidance, which exempts anonymizing software providers from money transmitter regulations. FinCEN consistently advised that entities not “accepting” or “transmitting” funds weren’t considered money transmitting businesses.
The DOJ’s charges, according to the defense, represent a significant and unprecedented departure from this established interpretation, potentially reflecting a regulatory power struggle with FinCEN. The defense uses analogies to illustrate the absurdity of the DOJ’s approach, comparing it to charging shovel manufacturers for their product’s potential use in burying bodies or burner phone manufacturers for their phones’ use in drug crimes.
The defense warns that the DOJ’s theory could broadly implicate developers of various privacy tools. Crypto advocacy groups, including Coin Center and the DeFi Education Fund, are considering amicus briefs, expressing concern that the case could stifle innovation and violate civil liberties. A court hearing is scheduled for July 22.
