In a letter filed on May 9 in Manhattan federal court, prosecutors rejected claims that they hid important evidence in the case against the co-founders of Samourai Wallet.
They argued they met all requirements for sharing information, including early disclosure of discussions with the Treasury’s Financial Crimes Enforcement Network.
Government Rejects Withholding Claims
Federal lawyers insisted they disclosed every “known substantive communication” with FinCEN well before any pretrial motions or the scheduled trial.
They wrote that defendants would have seven months to review the material. The prosecutors said there was no reason for a special hearing or extra remedies once all the relevant documents had been turned over.
Charges Against Samourai Founders
Keonne Rodriguez and William Hill face two main accusations. The first is a conspiracy to launder money by helping criminals move Bitcoin.
The second charge is running an unlicensed money transmitting business, in violation of both the Bank Secrecy Act and a separate criminal statute. Both men pleaded not guilty after charges were unsealed and they were arrested in April 2024.
Defense Points to FinCEN Guidance
The founders asked for a hearing under the landmark Brady ruling. They argued that prosecutors waited too long to reveal a key FinCEN opinion given six months before charges were filed.
According to their motion, Fincen staff told government lawyers that Samourai Wallet’s design would not count as a money services business under agency rules. The defence says this view should have made prosecutors think twice about the money transmitter charge.
Prosecutors’ Note
In their response, the government stressed that the comments from FinCEN officials were informal and reflected personal views. They pointed out that the agency never put the matter to its policy committee or issued an official ruling.
An internal email did note that a lack of custody over user funds “would strongly suggest” no MSB status. Yet prosecutors wrote that regulators did not commit to a final decision and that the founders could not rely on the informal talk to avoid criminal charges.
Also Read: FinCEN To Bar Huione Group From U.S. Banking Over Money Laundering & Ties With N.Korean Hackers
Key Legal Disputes at Hand
Prosecutors accept that the FinCEN talk may matter for the Bank Secrecy Act claim. They reject its relevance to the separate criminal count under Section 1960. That law requires knowing the transmission of illicit funds to support crime.
The government maintains that Samourai Wallet developers facilitated transfers themselves rather than simply providing software tools, a point at the heart of the FinCEN guidance released in 2019.
Wider Impact on Crypto Industry
The Samourai Wallet trial follows other high-profile cases, including the Tornado Cash prosecution. Together, they raise questions about how much control developers of privacy tools bear over user actions.
U.S. authorities say the two founders handled over two billion dollars in illicit transfers, including one hundred million tied to dark web markets. Both men could face up to twenty-five years in prison if convicted on all counts.
Ongoing Regulatory Evolution
This legal fight comes as U.S. regulators and lawmakers refine rules for digital assets. Some want tighter oversight of mixing services to curb crime. Others worry that harsh prosecutions could stifle innovation.
The outcome may guide future approaches to crypto mixers and show how much weight informal agency advice holds in court.
Also Read: Samourai Wallet Trial Paused as Parties Consider Case Dismissal