Samourai Wallet Founders Say Feds Hid Key FinCEN Guidance in Crypto Mixer Case

Attorneys for the co-founders of Samourai Wallet, a cryptocurrency mixing service, allege that U.S. federal prosecutors withheld key information for over a year and a half—information that could have significantly undermined the criminal case against their clients.

In a letter submitted to a Manhattan federal court on May 5, lawyers for Samourai co-founders Keonne Rodriguez and William Hill claimed that prosecutors failed to disclose a pivotal conversation with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). According to the letter, FinCEN had advised prosecutors that, under current guidance, the Samourai Wallet app likely did not qualify as a "Money Services Business" (MSB), and therefore would not require a 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 defense wrote in the letter. They argue the suppression of this information violates legal disclosure requirements and undermines the basis of the government's case.

Key FinCEN Call Withheld

The suppressed guidance stems from a government call with FinCEN officials Kevin O’Connor, chief of the agency’s Virtual Assets and Emerging Technology Section, and Policy Division staffer Lorena Valente. In an email summarizing the call—only recently disclosed to the defense on April 1, 2025—FinCEN reportedly said that since Samourai does not hold custody of users’ cryptocurrency (i.e., it lacks access to private keys), the company would not be considered an MSB under existing guidelines.

While FinCEN officials acknowledged that the government could attempt to argue Samourai exercised functional control over the funds, they noted that such an interpretation had never been explicitly addressed in FinCEN guidance—making the argument “difficult” to sustain, according to the summary.

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

By law, prosecutors were supposed to share this information within two weeks of unsealing charges against the Samourai founders—setting a disclosure deadline of May 8, 2024. Instead, the defense claims, the evidence was kept from them for nearly a year.

Legal Fallout and Dismissal Bid

Rodriguez and Hill were arrested in April 2024, following February charges that they operated an unlicensed money transmitting business and engaged in a conspiracy to launder money. Prosecutors allege Samourai facilitated over $2 billion in unlawful transactions, including more than $100 million tied to darknet markets and fraud.

Both defendants pleaded not guilty and have maintained that their service was lawful. Their lawyers now plan to seek a hearing to determine why the disclosure was delayed, and are asking the court to consider appropriate remedies.

The defense has also stated it will renew its motion to dismiss the case based on the newly revealed FinCEN guidance. They argue their clients lacked fair notice that their conduct was potentially criminal and believed they were operating within the bounds of the law.

Adding weight to their position is an April 7, 2025 memo from Deputy Attorney General Todd Blanche, which advised federal prosecutors not to pursue criminal cases against crypto mixers for "unwitting violations" of regulatory requirements. Following that policy shift, prosecutors and the defense jointly requested additional time on April 28 to consider whether to proceed with the case at all.

“If the government were to resist the Blanche Memo’s directive and push forward,” the defense wrote, “then they could not possibly be prosecuted for not having a license if they were not money transmitters under FinCEN’s guidance.”

The court has not yet ruled on the defense’s requests.