The U.S. federal government has firmly rejected accusations that it withheld crucial evidence in its case against the co-founders of Samourai Wallet, a crypto mixing platform facing charges for allegedly operating without the proper licenses.
In a letter dated May 9 and submitted to a Manhattan federal court, prosecutors defended the timing and transparency of their disclosures, specifically addressing a previously undisclosed discussion with officials at the Financial Crimes Enforcement Network (FinCEN). The defense had accused the prosecution of late disclosure, but the government insists it acted within the legal bounds and in good faith.
According to the letter, the prosecution shared “all known substantive communications” between their office and FinCEN long before the start of any trial or pretrial motions—giving the defense roughly seven months to review the material. “Nothing more is warranted,” the prosecutors stated, pushing back against the defense’s recent motion requesting a hearing on the matter.
The controversy revolves around an August 2023 conversation between prosecutors and two key FinCEN representatives—Kevin O’Connor, who leads the agency’s Virtual Assets and Emerging Technology Section, and Lorena Valente from the Policy Division. During that call, both FinCEN staffers reportedly expressed personal, caveated opinions suggesting that Samourai Wallet might not fall under the “money services business” (MSB) classification, largely because the platform does not custody user funds.
Defense attorneys for Samourai Wallet co-founders Keonne Rodriguez and William Hill argue that this should have been a game-changer. They contend that this informal guidance indicated Samourai was not legally required to register as an MSB—meaning their clients could not reasonably be prosecuted for operating without a license. Rodriguez and Hill were charged in February 2024 and arrested in April, both pleading not guilty to conspiracy to run an unlicensed money transmitting business and conspiracy to commit money laundering.
The defense claims that had this FinCEN guidance been disclosed earlier, it could have supported their motion to dismiss the case entirely. They filed that motion in April, referencing a Justice Department memo from Deputy Attorney General Todd Blanche issued around the same time. The memo appeared to signal a shift in federal policy, suggesting that the DOJ would avoid prosecuting crypto mixers unless there was clear evidence of intentional misconduct or regulatory violations.
But the prosecution isn’t budging. They maintain that the FinCEN representatives’ remarks were informal, non-binding opinions that did not reflect an official policy stance. In fact, they cite an internal email from Assistant U.S. Attorney Andrew Chan summarizing the call. In it, Chan notes that while the FinCEN staff indicated Samourai likely didn’t meet the MSB criteria, they also “did not have a sense” of how the agency’s policy committee would officially rule on the matter.
As for the Blanche memo, prosecutors argue that it’s legally irrelevant in this case. They remind the court that the document explicitly states it is not intended to create enforceable rights or legal defenses—effectively undermining its use as grounds for dismissal.
The Samourai Wallet case is shaping up to be a pivotal moment in the legal treatment of crypto mixing services. While the defense argues that Samourai was operating within a regulatory gray area, the government appears determined to test the boundaries of existing laws and how they apply in an increasingly decentralized financial landscape.
With the trial date still ahead and tensions rising over what counts as prosecutable behavior in the crypto space, this case could set a significant precedent—particularly when it comes to how informal regulatory guidance is interpreted and used in court.
