Samourai Wallet Developers Seek Case Dismissal Amid DOJ Policy Shift

The developers behind the banned Bitcoin mixing app Samourai Wallet are seeking a reprieve from their legal troubles, as the Department of Justice (DOJ) considers dropping the case against them. The co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, were arrested in April 2024 following the shutdown of the app by federal authorities. The app allowed users to hide previous crypto transactions, a feature that raised concerns about its potential use in illicit activities.

A recent letter from the legal team of the Samourai Wallet co-founders and prosecutors requested a 16-day extension from the court. This extension is being sought as prosecutors weigh the possibility of dropping the case. The defendants had earlier written to the U.S. attorney for the Southern District of New York, asking for the case to be dismissed following the disbandment of the DOJ's crypto-dedicated enforcement team.

The DOJ has indicated that it will no longer pursue criminal charges against crypto exchanges, crypto mixing services, or holders of cold wallets, unless they are involved in activities such as embezzlement, scams, rug pulls, and hacks. This shift in policy comes under the new administration, which has taken a more crypto-friendly stance. The case of Samourai Wallet has received less attention compared to that of Tornado Cash, another mixing service that was shut down by U.S. authorities in 2022. Tornado Cash was accused of being used to launder dirty money, and its co-founders, Roman Storm and Roman Semenov, were alleged to have laundered over $1 billion in criminal proceeds.

In response to the Tornado Cash case, the largest crypto exchange in the United States bankrolled a lawsuit arguing that the sanctioning of Tornado Cash was unjust. Privacy-advocating politicians also spoke out about the case, claiming that the app's blacklisting was an attack on civil liberties. The U.S. Treasury delisted Tornado Cash from its list of sanctioned parties last month, and a federal court permanently barred the body from reimposing sanctions on it.

Since the new administration took office, the DOJ and the U.S. Securities and Exchange Commission have dropped several high-profile cases against crypto firms. The new administration has campaigned on a platform to support the industry and has received backing from prominent figures in the crypto and Silicon Valley communities. The outcome of the Samourai Wallet case remains uncertain, but the developers are hopeful that the changing regulatory landscape will lead to a favorable resolution.