In the latest development of Samourai Wallet’s case against the US regulator, Keonne Rodriguez, the founder, was released on a $1 million bond. This news unfolded in the US District Court for the Southern District of New York on April 29, 2024.
However, this case remains a discussion and concern among the crypto community and industry players.
US Seeks Extradition of Samourai Wallet Co-founder
Rodriguez secured his release by posting property as a bond at 610 Wood Street, Harmony, PA. Yet, the terms of his release are stringent.
“Of note are the conditions of release: (i) Defendant is not to operate, work for, or perform services for Samourai Wallet. (ii) Defendant is not to engage in any cryptocurrency transactions, directly or indirectly, w/o prior approval of [Pretrial Services] PTS and the Government. (iii) Defendant is to have no contact with his co-defendant, directly or indirectly, except in the presence of counsel,” Inner City Press reports.
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The case against Rodriguez and his associate extends beyond national boundaries. Rodriguez’s co-defendant, William Hill, is currently detained in Portugal and awaiting extradition. The Department of Justice (DOJ) intends to bring Hill to the US to face similar charges.
This legal battle comes following accusations that Samourai Wallet facilitated billions in illicit transactions. According to Special Agent Thomas Fattorusso of the Internal Revenue Service, Criminal Investigation (IRS-CI), approximately $2 billion bypassed regulatory scrutiny via Samourai Wallet.
Agent Fattorusso further alleged Samourai for laundering over $100 million in criminal proceeds.
The crackdown on Samourai Wallet’s operations was a coordinated effort involving IRS-CI’s Cyber units in New York and Los Angeles alongside international law enforcement bodies. This action led to the seizure of Samourai’s operational infrastructure and removing its app from Google’s Play Store in the US.
Amidst these developments, other self-custody crypto wallet providers like Phoenix Wallet and Wasabi Wallet have voluntarily ceased services for US customers. The companies behind these wallets have voiced concerns over the uncertain regulatory environment affecting their operations and the broader implications for the crypto industry.
This regulatory tightening mirrors earlier actions taken by US authorities. On April 10, the Securities and Exchange Commission (SEC) issued a Wells notice to Consensys, the parent company behind MetaMask. The SEC has accused Consensys of operating as an unregistered securities broker via its MetaMask wallet.
Read more: How Does Regulation Impact Crypto Marketing? A Complete Guide
Consensys then filed a legal complaint against the SEC on April 25 in response to the action. The company called the SEC actions “an unlawful overreach of authority.”
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