Samourai Wallet founders receive support from CryptoQuant CEO
The CEO of CryptoQuant, Ki Young Ju, has expressed his support for the founders of Samourai Wallet following their indictment by the U.S. Department of Justice. The founders are accused of operating a crypto mixing service that was allegedly involved in laundering nearly $100 million. Ju has defended the role of the crypto mixer in protecting user privacy and has argued against the charges brought against the founders. He stated that mixing itself is not a crime and that even crypto exchanges use mixing to safeguard user privacy. Ju also emphasized that the way a feature is used and the intent behind it determines whether it is lawful or illicit. He compared the Samourai wallet case to the usage of a knife, which can be both lawful and illegal, and questioned why the inventors of such tools are punished instead of those who use them.
The DoJ has accused the Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill, of designing and operating a service that facilitated over $100 million in transactions tied to illicit activities. It is alleged that since its inception in 2015, the service has handled about $2 billion in illicit transactions, generating approximately $4.5 million in fees. Rodriguez has been arrested and is scheduled for arraignment in Pennsylvania, while Hill has been detained in Portugal and is awaiting extradition to the U.S. The crackdown also involved seizing the Samourai Wallet website hosted in Iceland and issuing a warrant to remove its mobile application from the Google Play Store.
Evidence from tweets and private messages suggests that the founders actively marketed their service to users looking to launder criminal proceeds. The application, which has been downloaded over 100,000 times, reportedly targeted participants in the black and grey markets, especially during the COVID-19 pandemic.
Edward Snowden, a well-known whistleblower and advocate for digital privacy, criticized the actions of the DoJ, stating that they had once again criminalized the developers of an app that restores financial privacy. Snowden believes that the solution lies in making money private by default and that privacy should not be considered exceptional, as it may lead to its criminalization.
Lyudmyla Kozlovska, a human rights advocate, also commented on the issue, highlighting the capabilities of U.S. law enforcement in detecting financial crimes involving cryptocurrencies. Kozlovska stated that if U.S. law enforcement agencies were able to identify a money laundering offense involving this particular wallet, then they must have the necessary tools to track Bitcoin transactions on the blockchain. She argued against the criminalization of mixing technologies and their developers.
Meanwhile, the Federal Bureau of Investigation (FBI) recently issued a warning to Americans about using unregistered cryptocurrency money-transmitting services, particularly those aimed at smart-contract-driven privacy tools. The FBI urged Americans to only use registered Cryptocurrency Money Services Businesses that comply with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) laws. The FBI stated that it had recently conducted law enforcement operations against cryptocurrency services that were not licensed in accordance with federal law, warning that anyone using unlicensed services could face financial disruptions during law enforcement actions, especially if their money is mixed with illegally obtained funds.
