Samourai Wallet says feds hid advice that crypto mixer was in the clear

Samourai Wallet’s lawyers allege federal prosecutors suppressed advice that the firm didn’t need a license before they charged executives at the crypto mixing service months later. 

In a May 5 letter to a Manhattan federal court, lawyers for Samourai co-founders Keonne Rodriguez and William Hill said prosecutors disclosed that the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) representatives told them six months before they charged the pair “that under FinCEN’s guidance, the Samourai Wallet app would not qualify as a ‘Money Services Business’ requiring a FinCEN license.”

“Shockingly, six months later, the same prosecutors criminally charged Keonne Rodriguez and William Hill with operating just such a business without a FinCEN license,” the lawyers added.

The letter claimed that prosecutors were required to share their discussions with FinCEN over Samourai two weeks after they unsealed charges, making the deadline May 8 last year, but instead “suppressed this information for over a year, disclosing it only on April 1, 2025.” 

Prosecutors charged Samourai CEO Rodriguez and its technology chief Hill with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy in February 2024, unsealing the charges and arresting the pair in April that year. 

Samourai’s mixing service took crypto from multiple users and blended it together to hide its origins. The government alleged the platform helped with over $2 billion in illegal transactions and facilitated over $100 million worth of money laundering transactions from online black markets and scammers.

Rodriguez and Hill both pleaded not guilty.

In the letter, their lawyers said prosecutors shared details of a call with Kevin O’Connor, chief of FinCEN’s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Policy Division staffer Lorena Valente.

According to an email from one of the prosecutors summarizing the call, FinCEN said that “because Samourai does not take ‘custody’ of the cryptocurrency by possessing the private keys to any addresses where the cryptocurrency is stored, that would strongly suggest that Samourai is NOT acting as an MSB [money services business].”

Samourai Wallet says feds hid advice that crypto mixer was in the clear
An excerpt of an email from prosecutor Andrew Chan said FinCEN “did not have a sense” of what it would decide on Samourai. Source: CourtListener

The email said O’Connor and Valente agreed that the government could try to argue that Samourai functionally controlled the crypto, “but that has never been addressed in the guidance, and so it could be a difficult argument” for prosecutors.

Samourai’s lawyers asked the court for a hearing “to determine the circumstances surrounding the Government’s late disclosure” and to administer a remedy.

Samourai to renew dismissal bid if case goes on

Rodriguez and Hill’s lawyers said that, using this latest information, they would again ask for the charges to be dismissed, arguing they lacked fair notice and “understood they were acting lawfully.”

Related: US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules 

Prosecutors and Samourai asked the court for more time on April 28 to consider potentially dismissing the case after the Justice Department rolled back its crypto enforcement.

Rodriguez and Hill bid to dismiss the case in early April, arguing it should be dropped as Deputy Attorney General Todd Blanche said in an April 7 memo that the Justice Department wouldn’t prosecute crypto mixers for “unwitting violations of regulations.” 

In the latest letter, their lawyers said if the government “were to resist the Blanche Memo’s directive and push forward,” then they would bid to dismiss as “if they were not money transmitters under FinCEN’s guidance, then they could not possibly be prosecuted for not having a license.”

Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers 

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New York district gets interim US Attorney as ex-SafeMoon CEO trial kicks off

Acting US Attorney for the Eastern District of New York (EDNY) John Durham has departed as President Donald Trump’s pick takes control of the office.

In a May 5 notice, the US Attorney’s Office for EDNY said Joseph Nocella will serve as interim US Attorney for the region for 120 days or until a Senate-confirmed nominee assumes the role. Nocella’s appointment came as jury selection began in the criminal trial of Braden John Karony, the former CEO of crypto firm SafeMoon.

It’s unclear how the advancement of Nocella, appointed by US President Donald Trump this month, could affect prosecutors’ case against Karony, who faces charges of securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy. Nocella said he intended to help prosecute “narcotics-traffickers, gang members, terrorists, human-traffickers and other criminals.”

The former SafeMoon CEO asked the court in February to consider pushing back the start of the trial based on “significant changes” Trump had proposed affecting US securities laws, potentially impacting his criminal case.

Related: What do crypto users want to happen to Alex Mashinsky?

Though not as well known for criminal cases involving high-profile figures in the crypto industry, the Eastern District of New York has been responsible for overseeing cases against individuals tied to digital assets, including a Securities and Exchange Commission (SEC) complaint against Hex founder Richard Heart and fraudsters.

Its neighboring district, the Southern District of New York, will oversee the sentencing of former Celsius CEO Alex Mashinsky on May 8. Jay Clayton, a Wall Street insider and the former chair of the SEC, became the interim US Attorney for the district in April.

Criminal trial to start on May 6

SafeMoon’s Karony, Kyle Nagy, and Thomas Smith were charged in November 2023 for “diverted and misappropriated millions of dollars’ worth” of the platform’s SFM token between 2021 and 2022. Karony has pleaded not guilty to all charges and has been free on a $3 million bond since February 2024.

In a May 5 filing, Karony agreed to have jury selection for his trial proceed under US Magistrate Judge James Cho. District Judge Eric Komitee is expected to oversee the trial starting on May 6.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

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Bryan Johnson is on a mission to not die. The 47-year-old multimillionaire has already applied his slogan “Don’t Die” to events, merchandise, and a Netflix documentary. Now he’s founding a Don’t Die religion.

Johnson, who famously spends millions of dollars on scans, tests, supplements, and a lifestyle routine designed to slow or reverse the aging process, has enjoyed extensive media coverage, and a huge social media following. For many people, he has become the face of the longevity field.

I sat down with Johnson at an event for people interested in longevity in Berkeley, California, in late April. We spoke on the sidelines after lunch (conference plastic-lidded container meal for me; what seemed to be a plastic-free, compostable box of chicken and vegetables for him), and he sat with an impeccable posture, his expression neutral. 

Earlier that morning, Johnson, in worn trainers and the kind of hoodie that is almost certainly deceptively expensive, had told the audience about what he saw as the end of humanity. Specifically, he was worried about AI—that we face an “event horizon,” a point at which superintelligent AI escapes human understanding and control. He had come to Berkeley to persuade people who are interested in longevity to focus their efforts on AI. 

It is this particular concern that ultimately underpins his Don’t Die mission. First, humans must embrace the Don’t Die ideology. Then we must ensure AI is aligned with preserving human existence. Were it not for AI, he says, he wouldn’t be doing any of his anti-death activities and regimens. “I am convinced that we are at an existential moment as a species,” says Johnson, who was raised Mormon but has since left the church. Solving aging will take decades, he says—we’ll survive that long only if we make sure that AI is aligned with human survival. 

The following Q&A has been lightly edited for length and clarity.

Why are you creating a new religion?

We’re in this new phase where [because of advances in AI] we’re trying to reimagine what it means to be human. It requires imagination and creativity and open-mindedness, and that’s a big ask. Approaching that conversation as a community, or a lifestyle, doesn’t carry enough weight or power. Religions have proven, over the past several thousand years, to be the most efficacious form to organize human efforts. It’s just a tried-and-true methodology. 

How do you go about founding a new religion?

It’s a good question. If you look at historical [examples], Buddha went through his own self-exploratory process and came up with a framework. And Muhammad had a story. Jesus had an origin story … You might even say Satoshi [Nakamoto, the mysterious creator of bitcoin] is like [the founder of] a modern-day religion, [launched] with the white paper. Adam Smith launched capitalism with his book. The question is: What is a modern-day religion, and how does it convince? It’s an open question for me. I don’t know yet.

Your goal is to align AI with Don’t Die—or, in other words, ensure that AI models prioritize and protect human life. How will you do that?

I’m talking to a lot of AI researchers about this. Communities of AIs could be instilled with values of conflict resolution that do not end in the death of a human. Or an AI. Or the planet.

Would you say that Don’t Die is “your” religion?

No, I think it’s humanity’s religion. It’s different from other religions, which are very founder-centric. I think this is going to be decentralized, and it will be something that everybody can make their own.

So there’s no God?

We’re playing with the idea that the body is God. We’ve been experimenting with this format of a Don’t Die fam, where eight to 12 people get together on a weekly basis. It’s patterned off of other groups like Alcoholics Anonymous. We structure an opening ritual. We have a mantra. And then there’s a part where people apologize to their body for something they’ve done that has inflicted harm upon themselves. 

It’s reframing our relationship to body and to mind. It is also a way for people to have deep friendships, to explore emotionally vulnerable topics, and to support each other in health practices.

What we’re really trying to say is: Existence is the virtue. Existence is the objective. If someone believes in God, that’s fine. People can be Christian and do this; they can be Muslim and do this. Don’t Die is a “yes, and” to all groups.

So it’s a different way of thinking about religion?

Yeah. Right now, religion doesn’t hold the highest status in society. A lot of people look down on it in some way. I think as AI progresses, it’s going to create additional questions on who we are: What is our identity? What do we believe about our existence in the future? People are going to want some kind of framework that helps them make sense of the moment. So I think there’s going to be a shift toward religion in the coming years. People might say that [founding a religion now] is kind of a weird move, and that [religion] turns people off. But I think that’s fine. I think we’re ahead.

Does the religion incorporate, or make reference to, AI in any way?

Yeah. AI is going to be omnipresent. And this is why we’ve been contemplating “the body is God.” Over the past couple of years … I’ve been testing the hypothesis that if I get a whole bunch of data about my body, and I give it to an algorithm, and feed that algorithm updates with scientific evidence, then it would eventually do a better job than a doctor. So I gave myself over to an algorithm. 

It really is in my best interest to let it tell me what to eat, tell me when to sleep and exercise, because it would do a better job of making me happy. Instead of my mind haphazardly deciding what it wants to eat based on how it feels in the moment, the body is elevated to a position of authority. AI is going to be omnipresent and built into our everyday activities. Just like it autocompletes our texts, it will be able to autocomplete our thoughts.

Might some people interpret that as AI being God?

Potentially. I would be hesitant to try to define [someone else’s] God. The thing we want to align upon is that none of us want to die right now. We’re attempting to make Don’t Die the world’s most influential ideology in the next 18 months.

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