DOJ's Policy Shift May Dismiss Charges Against Samourai Wallet Co-Founders

Prosecutors in New York are considering the dismissal of charges against the co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill. This potential decision follows a recent memo issued by the U.S. Department of Justice (DOJ), which outlines new enforcement priorities for digital assets. The memo, issued by U.S. Deputy Attorney General Todd Blanche, instructs staff to focus on cases involving fraud, ransomware, and other criminal activities that directly harm individuals, rather than targeting the underlying technology or services.

The memo, released on April 7, announced the disbandment of the DOJ’s crypto unit, the National Cryptocurrency Enforcement Team (NCET). It also directed staff to no longer bring cases against crypto exchanges, mixing services, or offline wallets “for the acts of their end users or unwitting violations of regulations.” Any ongoing investigations inconsistent with this new policy were ordered to be closed, and the DOJ’s criminal division was tasked with reviewing ongoing cases for consistency with the new policy.

In response to the memo, lawyers for Hill and Rodriguez sent a letter to prosecutors in the Southern District of New York (SDNY) on April 10, requesting the dismissal of the superseding indictment under the Blanche Memo. The parties met to discuss the request on April 24. The co-founders were charged last April with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business, with the charges carrying a maximum sentence of 20 years and five years, respectively. Prosecutors alleged that Samourai Wallet had facilitated around $2 billion in “unlawful transactions” between 2015 and 2024, with the pair collecting a combined $4.5 million in fees.

The potential dismissal of charges against Samourai Wallet co-founders reflects the DOJ's evolving approach to digital asset regulation. The new enforcement priorities aim to balance the need for regulatory oversight with the promotion of innovation in the digital asset space. By focusing on cases that involve clear instances of harm, the DOJ seeks to ensure that its actions are both effective and proportionate, fostering a more stable and predictable environment for innovation while protecting consumers and investors from fraudulent activities.

The DOJ's shift in focus is part of a broader effort to provide legal clarity in the digital asset space. As the industry continues to grow and evolve, clear guidance on what constitutes illegal activity is essential. This clarity will help to foster a more stable and predictable environment for innovation, while also protecting consumers and investors from fraudulent activities. The DOJ's new enforcement priorities are likely to have a significant impact on the digital asset industry, promoting innovation while ensuring that regulatory actions are both effective and proportionate.