SDNY Withholding Of Evidence Undermines Charges Against Samourai Wallet
The recent revelation of suppressed exculpatory evidence in the criminal case against Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill has sent shockwaves through the crypto community. The defense’s letter filed this morning exposed that the Southern District of New York (SDNY) had consulted with FinCEN prior to the indictment of the developers, seeking guidance on the viability of bringing unlicensed money transmission charges against a non-custodial service.
According to the filing, FinCEN explicitly told prosecutors that a mixer like Samourai, which does not take custody of cryptocurrency by possessing private keys, does not meet the criteria of being classified as a money services business (MSB). However, internal communications revealed that prosecutors were considering bringing charges based on the “functional control” of the code, particularly focusing on Samourai’s control over the user interface and coinjoin server.
The communications between FinCEN and SDNY came to light following a Brady request, which ordered the government to disclose any evidence that may exonerate the developers. The delayed disclosure of this crucial information has raised concerns about the fairness of the trial, impacting both the bail requirements imposed on the developers and the judge’s decision on a motion to dismiss.
The defense is now seeking a hearing to address the misconduct of SDNY and potential remedies, including the dismissal of charges. They argue that the prosecution’s actions amount to “regulation by prosecution,” as they went against FinCEN’s guidance and indicted the developers for operating an unlicensed money services business despite being informed otherwise.
This case has sparked outrage among advocacy groups and legal scholars, who see it as a blatant violation of regulatory guidance. The government’s refusal to disclose materials received from FinCEN and OFAC in a similar case involving Tornado Cash developers further raises concerns about the transparency and fairness of the legal process.
As the crypto community rallies behind the developers, calling for justice and accountability, it remains to be seen how SDNY will respond to the mounting pressure. The defense’s assertion that the case should be thrown out altogether, given that the developers were not money transmitters under FinCEN’s guidance, highlights the urgency of addressing the misconduct and upholding the rule of law.
In conclusion, the suppression of exculpatory evidence in the case against Samourai Wallet developers raises serious questions about the integrity of the legal system and the government’s adherence to regulatory guidance. The defense’s efforts to seek justice and hold SDNY accountable for its actions underscore the importance of transparency and fairness in the prosecution of crypto-related cases.
