The legal battle surrounding privacy-focused crypto platform Samourai Wallet has taken a sharp turn. Lawyers for the company’s co-founders, Keonne Rodriguez and William Hill, now claim federal prosecutors withheld crucial guidance from the U.S. Treasury that could have cleared them of wrongdoing long before charges were filed.
In a letter submitted to a Manhattan federal court on May 5, Samourai’s legal team accused prosecutors of suppressing a conversation with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) — a conversation that reportedly took place six months before Rodriguez and Hill were charged.
According to the letter, FinCEN officials told prosecutors that Samourai Wallet’s app did not qualify as a “Money Services Business” (MSB) under their existing guidance. That would mean the platform did not need a FinCEN license to operate, directly contradicting the central claim of the government’s case.
“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 wrote.
Prosecutors Allegedly Missed Disclosure Deadline
The lawyers argue that prosecutors were legally required to share their conversations with FinCEN by May 8, 2024, just two weeks after the charges were unsealed. Instead, the disclosure only happened a year later, on April 1, 2025 — well past the deadline.
This latest twist could dramatically shift the case, which began in early 2024 when federal authorities charged Rodriguez and Hill with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy. The two were arrested in April 2024 and have since pleaded not guilty.
Samourai Wallet’s service allows users to mix cryptocurrency from multiple wallets, making it harder to trace transactions — a process the government says was used to facilitate over $2 billion in illegal transactions, including more than $100 million linked to black markets and scams.
FinCEN’s Internal View: Samourai Didn’t Take Custody
Key to the defense’s argument is an internal email from a prosecutor summarizing the FinCEN conversation. The email reveals that Kevin O’Connor, head of FinCEN’s Virtual Assets and Emerging Technology section, and Lorena Valente from the Policy Division, said Samourai’s lack of custody over users’ crypto suggested it was not an MSB.
“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),” the email stated.
While FinCEN noted prosecutors could try to argue Samourai “functionally controlled” funds, the officials acknowledged that this would be a weak argument, as no formal guidance covers such a scenario.
Dismissal Back on the Table
Following this revelation, Rodriguez and Hill’s legal team is preparing to renew their motion to dismiss the charges, arguing the pair had no fair warning their actions were illegal.
They’ve also asked the court to hold a hearing to investigate why this FinCEN communication was withheld and to consider sanctions or other remedies.
The court filing comes just days after the Justice Department signaled a shift in crypto enforcement, with Deputy Attorney General Todd Blanche stating in an April 7 memo that the DOJ would not pursue crypto mixer cases based on “unwitting violations” of unclear regulations.
Both the prosecution and defense jointly asked for more time on April 28 to weigh the implications of the DOJ’s new approach. But the defense made it clear: if prosecutors continue the case, they will fight back hard.
“If [Rodriguez and Hill] were not money transmitters under FinCEN’s guidance,” the lawyers wrote, “then they could not possibly be prosecuted for not having a license.”
The judge will now decide whether to grant a hearing and allow the defense to pursue dismissal. This case is being closely watched across the crypto industry, especially by developers of privacy tools — many of whom fear vague regulations are being used to criminalize technology.
As the battle over privacy and regulation in crypto intensifies, Samourai’s defense may now hinge on one simple fact: the government’s own experts didn’t believe they broke the law.
Also Read: Ripple CTO Explains Why SEC Ended XRP Lawsuit After 4 Years
