- The US DoJ’s charges against the BTC-focused founders of Samourai Wallet are drawing mixed reactions.
- BTC’s recovery stalled after the development, reversing the first week’s gains.
Samourai wallet, a Bitcoin [BTC]– focused on wallet and mixer, is the latest victim of the increased US crackdown on crypto mixers in an effort to curb illegal financing through crypto.
The US DOJ has charged Samourai Wallet mixer founders Keonne Rodriguez and William Lonergan Hill with operating an unlicensed money transmitter business and money laundering.
In a press release dated April 24, part of the US DoJ statement read:
“These charges stem from the defendants’ development, marketing and operation of a cryptocurrency mixer that conducted more than $2 billion in unlawful transactions and more than $100 million in money laundering transactions from illegal dark web markets, such as Silk Road and Hydra Market , has facilitated. ”
The statement cited X (formerly Twitter) messages from accounts associated with Samourai Wallet and its founders as part of the indictment.
Privacy under attack? BTC’s recovery is stagnating
However, the founder of on-chain analytics CryptoQuant, Ki Young Ju, viewed the arrest of the Samourai wallet founders as misplaced rather than targeting ‘real’ criminals. He joked,
“The US DOJ has arrested #Bitcoin privacy technology pioneers. Privacy is a core value of Bitcoin. Mixing itself is not a crime. Even crypto exchanges use mixing to protect user privacy. It’s like punishing the inventor of the knife instead of the person who uses the knife.”
Crypto mixers improve the privacy of cryptocurrency transactions and are very welcome. This is especially true as Google can now track a number of blockchain addresses and associated transactions.
Ethereum [ETH] founder Vitalik Buterin also favors crypto mixer Railgun and recently defended his action by stating that “privacy is normal.”
Similarly, Stacks co-founder Muneeb Ali repeated Buterin’s stance on the legal troubles of Samourai Wallet’s founders. He emphasized:
“Privacy should be normal, not illegal.”
However, crypto mixers also make it challenging to detect illegal transactions and are preferred by criminals money laundering methods. Tornado Cash was recently sanctioned for this reason.
Swan Bitcoin’s Yan Pritzker’s response to Samourai Wallet was mixed. He defended the founders for bringing privacy technology to Bitcoin, noting that:
“Samourai was trying to do the right thing by bringing privacy technology to many legitimate people. Criminal use constitutes a small part of mixed use. The merchant where you spend your Bitcoin should not know how much Bitcoin you own.”
However, Pritzker also blasted the founders for skewering the US DoJ marked That,
“But they were wrong when they started promoting a service to criminals, and the design using a centralized coordinator run by a company was an obvious SPOF and was predictably attacked after they kept poking the bear.”
BTC’s recovery has since stalled as the price fell below $67,000 hours after development. At the time of writing, BTC was barely holding the $64,000 level.