Prosecutors Hide Crypto Mixer Cleared by Feds—The Scandal, the Drama, the Recipes for Irony 🍸

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It is a truth universally acknowledged, that a prosecutor in possession of a suspiciously confident frown, must be in want of a withheld document. Or so the lawyers for Samourai Wallet might agree, as they accuse their federal counterparts of executing a legal pirouette so dazzling, one almost forgives their apparent forgetfulness regarding crucial advice.

In a letter that could only be improved by an embroidered handkerchief and a fainting sofa, legal representatives for the daring Samourai co-founders, Messrs. Keonne Rodriguez and William Hill, have informed the good people of the Southern District of New York that the prosecutors quietly ignored—nay, suppressed—the wisdom bestowed upon them by those modern-day prophets, the Financial Crimes Enforcement Network (FinCEN).

According to this missive, months before our heroes were marched through the judicial coliseum, the US Treasury’s own sages reportedly advised prosecutors—by smoke signal, carrier pigeon, or perhaps email—that the Samourai Wallet app required no FinCEN license. The sages’ argument? Samourai, being more of a “crypto butler” than a “crypto banker,” never held the keys (private, public, or presumably, to the executive washroom), and thus could not be considered a Money Services Business—a delightful euphemism for “something requiring stifling regulation.”

“Imagine our shock, our scandalized monocles a-topple!” the lawyers howled—well, wrote—when, six months later, the same prosecutors accused Rodriguez and Hill of exactly the thing FinCEN had exonerated them from (one assumes while twirling their mustaches and stroking imaginary cats).

Justice, apparently, travels by horse-drawn carriage: prosecutors were duty-bound to reveal their FinCEN chinwag within a fortnight of unsealing the charges, yet the information—perhaps busy enjoying a gap year—only emerged nearly a year later, on April Fools’ Day. Because sometimes, reality has a sense of humor that Wilde himself might admire.

The government, in its unyielding quest for shades of gray, alleged Samourai’s crypto-mixing adventures were a veritable Pandora’s Box, exuding over $2 billion in forbidden transactions. For extra garnish, over $100 million was linked to shady markets and online scoundrels (the types invited to only the very worst parties).

Rodriguez and Hill, with all the innocence of Victorian orphans, pleaded not guilty. Their lawyers produced emails (because paper trails are always in fashion), where FinCEN officials declared that, since Samourai lacked custody of user funds, branding them an “MSB” would require a logic leap worthy of a circus acrobat. Kevin O’Connor and Lorena Valente of FinCEN displayed rare honesty, admitting such a charge may be “difficult”—legalese for “You’re on your own, chaps!”

Relishing the drama, Samourai’s lawyers requested a hearing—presumably with snacks and a side of justice—to examine how exactly this legal soufflé fell so flat, and whether a remedy could be found. Preferably one with a cherry on top.

Chasing Dismissal Like Fine Champagne 🥂

Armed with this fresh bouquet of bureaucratic irony, Rodriguez and Hill’s legal team threatened to renew their plea for dismissal. Their argument? They sincerely believed they were obeying the law—a belief often met with champagne and confetti in legal circles, or so one is led to believe.

Meanwhile, both camps begged the court for more time, citing the Justice Department’s newfound restraint in prosecuting crypto mixers. Deputy Attorney General Todd Blanche delivered a memo that all but declared: “No one shall be burnt at the stake for accidental regulatory witchcraft.”

Should the government boldly ignore this guidance and gallop onward, the Samourai duo stands ready to argue once more: “If we are not money transmitters, then pray tell, what are we doing in this courtroom, aside from wasting everyone’s lunch hour?”

In summary, it is a world where yesterday’s innocence is today’s criminality, and tomorrow’s defense may well hinge on whether you brought your own private keys—and a Wildean wit—to court. 🧐💼

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2025-05-06 04:36