Samourai sentences cement DOJ’s money transmitter theory for crypto mixers
The co-founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, were sentenced to four and five years in prison for operating an unlicensed money-transmitting business and facilitating transactions involving criminal proceeds. The U.S. Department of Justice (DOJ) argued that their CoinJoin mixing service concealed illicit fund movements. Despite being a non-custodial wallet, the court ruled that the coordination of transactions through their Whirlpool implementation qualified as money transmission services, warranting the need for FinCEN licensing. This case parallels the Tornado Cash situation, emphasizing the necessity of complete decentralization to avoid prosecution in crypto privacy systems. The DOJ mentioned that the co-founders profited without implementing required KYC and AML practices. In a notable shift, the DOJ indicated that writing code without malicious intent should not be considered a crime. This highlights ongoing concerns and debates around privacy rights and regulatory measures in the crypto space.
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