Samourai Wallet Lawyers Accuse Prosecution of Withholding Evidence
Lawyers for Samourai Wallet have accused the prosecution of suppressing critical evidence in its case against the mixing service’s co-founders, calling for a hearing to determine whether the case should now be tossed out in light of the alleged Brady violation.
Alleged Brady Violation
In a Monday court filing, lawyers for Samourai Wallet told Judge Richard Berman of the Southern District of New York (SDNY) that in August 2023 — six months before prosecutors charged Keonne Rodriguez and William Lonergan Hill with one count each of conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business — the Financial Crimes Enforcement Network (FinCEN) told prosecutors that, under their guidelines, Samourai Wallet didn’t qualify as a money transmitting business and did not need a license to operate.
Failure to Disclose Information
Prosecutors went ahead and charged Rodriguez and Hill anyway, and did not tell either the court or Samourai Wallet’s lawyers about their communication with FinCEN until April 1, 2025 when responding to the defense’s specific Brady request for “any information suggesting that Samourai Wallet did not require a money transmitter license or that the Defendants did not believe that it required such a license, including but not limited to communications with the Treasury Department or FinCEN,” the defense attorneys wrote.
Impact on the Case
“The fact that FinCEN took the same position regarding Samourai Wallet and conveyed it to these same prosecutors, and that the prosecutors nonetheless charged the Defendants with committing a crime is shocking,” Samourai Wallet’s lawyers wrote in their filing.
Brady Violation Prejudice
Samourai Wallet’s lawyers told the court that the government’s failure to disclose its pre-indictment consultation with FinCEN has already prejudiced Rodriguez and Hill’s case.
Legal Ramifications
Under the landmark Supreme Court case Brady v. Maryland in 1963, the court held that the government must hand over any exculpatory or material evidence to the defense in a timely manner. Brady violations are considered a violation of the defendant’s due process, and are often grounds for a case to be thrown out.
Next Steps
Last month, lawyers for Samourai Wallet asked the court to toss out the case under the auspices of the so-called “Blanche Memo” — a recent memo from U.S. Deputy Attorney General Todd Blanche to Department of Justice (DOJ) staff, ordering them to stop prosecuting regulatory violations involving crypto.
The next hearing in the case is slated for July 22, 2025 at 1:00 p.m. ET.
FinCEN did not respond to CoinDesk’s request for comment.