Samourai Wallet Founder Denied Bail Modifications

Samourai Wallet founder Keonne Rodriguez, arrested in April for operating an unlicensed money transmitter, faced a hearing in a Southern District of New York court on Tuesday, where his bail conditions remained unchanged.

Rodriguez’s defense sought two key modifications: removal of the home detention requirement and looser restrictions on cryptocurrency transactions to cover legal fees. However, prosecutors argued he posed a flight risk due to the severity of the charges and the existence of alleged escape plans detailed in handwritten notes.

Rodriguez, who previously worked at Blockchain.com, along with co-founder William Lonergan Hill, is facing money laundering charges related to Samourai Wallet, a privacy-focused Bitcoin app. The prosecution claims the wallet facilitated over $2 billion in illicit transactions.

The case has drawn significant attention, viewed as government overreach by Bitcoin advocates, with concerns raised that a negative outcome could set a precedent for targeting non-custodial software developers. Senators Cynthia Lummis and Ron Wyden later expressed concerns over the Department of Justice’s interpretation of laws concerning unlicensed money transmitting businesses and the implications for crypto asset services.

Rodriguez’s counsel argued that he does not believe he committed a crime, though both he and Hill face a maximum of 25 years in prison if convicted.

Parallel legal issues are emerging in the cases of Tornado Cash co-founders, with ongoing debates about whether founders should retain control over users’ cryptocurrency assets to be classified as money transmitters.

Rodriguez and Hill’s next trial is set for December 16. Notably, Rodriguez stated in 2015 that Bitcoin is about facilitating transactions deemed unacceptable by traditional financial institutions.