Keonne Rodriguez, founder of Samourai Wallet, was denied a request to change his bail conditions by a Southern District Court of New York judge. He faces charges of money laundering conspiracy and operating an unlicensed money-transmitting business.
The court was recently swayed by notes found among his belongings, which prosecutors interpreted as a potential escape strategy.
These handwritten notes outlined a plan, which included packing essentials like passports, $10,000 in cash, a phone with an unused SIM, and encrypted USBs. Further notes hinted at potential travel routes from Miami to destinations like Cuba or the United Kingdom, with stops at shady gas stations and using "cash only."
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Prosecutors used these notes to justify Rodriguez's continued house arrest. His legal team, however, countered that these plans were merely part of a general emergency preparedness routine and not a sign of intent to escape. Nevertheless, the judge sided with the prosecution.
Rodriguez and co-founder William Hill were arrested in April on allegations of facilitating more than $2 billion in illegal transactions and $100 million in dark web money laundering. If convicted, they could each face up to 25 years behind bars.
Samourai Wallet was a self-custodial crypto wallet that also offered services like Whirlpool and Ricochet, designed to conceal the trail of crypto transactions.
The legal defense for Rodriguez and Hill has pointed to a May letter from US Senators Cynthia Lummis and Ron Wyden, which criticizes the Department of Justice's (DOJ) approach to prosecuting non-custodial crypto services like Samourai Wallet. The senators argue that the DOJ's stance contradicts guidelines from the Financial Crimes Enforcement Network (FinCEN) regarding what constitutes a "money transmitting business." The letter states:
At no point when operating or providing non-custodial services do such service providers "accept" crypto assets from their users. At all times, users retain exclusive custody and control over the private keys to their crypto assets.
In other news, Alexey Pertsev, the developer of the sanctioned crypto mixer Tornado Cash, was denied bail three times as his legal team prepared an appeal against his money laundering charges.
