The developers behind Samourai Wallet have recently pleaded guilty to a single count of conspiracy to operate an unlicensed money-transmitting business. This plea deal has resulted in the dismissal of a parallel money laundering conspiracy charge and caps potential prison time at five years. Additionally, the developers are facing $237 million in forfeiture and a $400,000 fine.
According to journalist Matthew Russell Lee, the sentencing for this case is scheduled for November 6. The defendants have agreed not to appeal if the sentence is five years or less, as stated by Bitcoin Policy Institute’s head of policy, Zack Shapiro.
During the court proceedings, Judge Jed Rakoff pressed Keonne Rodriguez to admit to his criminal conduct “in his own words.” Rodriguez confessed that he was aware users were using the wallet to launder criminals’ money. Prosecutors argued that this knowledge alone is sufficient for a 60-month sentence, even if the developers were not directly involved in the laundering.
Shapiro pointed out that if both counts had gone to verdict, the combined federal guidelines would have resulted in a much longer sentence. By pleading guilty to the unlicensed transmission conspiracy, the developers are facing a statutory maximum of five years instead of over a decade in prison.
The defense-side reaction to this outcome framed it as a pragmatic decision rather than a legal endorsement of the US Department of Justice’s theory. Amanda Tuminelli, executive director and CLO at the DeFi Education Fund, argued that the DOJ misinterprets Section 1960 when accusing a non-custodial software developer of transferring funds on behalf of the public. She emphasized that the policy fight over how the law should apply to open-source wallet software remains unchanged.
The case background reveals that US and international authorities shut down Samourai on April 24, seizing its domain and web infrastructure in collaboration with various law enforcement agencies. Prosecutors alleged that the founders ran a mixing service through Samourai that processed over $2 billion in Bitcoin linked to illicit activities, including $100 million from dark-web markets. Despite being one of the most popular privacy-focused Bitcoin wallets with over 100,000 downloads, the app was removed from Google Play for US users.
In conclusion, the guilty plea from the developers of Samourai Wallet marks a significant development in the ongoing legal battle over the regulation of cryptocurrency transactions. The outcome of this case will undoubtedly have far-reaching implications for the future of open-source wallet software and the broader crypto community.