The co-founder of Bitcoin privacy app Samourai Wallet opposed the US government’s criminal charges, arguing that the Justice Department’s lawsuit should be abolished as it has been broken by years of Treasury policies and threatens to criminalize open source software.
Keonne Rodriguez and William Hill have filed a joint motion asking a federal judge in Manhattan to dismiss the charges, accused of running a remittance business with unknown funds and a conspiracy to commit money laundering.
The pair’s lawyers say Samourai’s wallets have never processed user funds and should not be considered a financial institution or a transferee under federal law.
At the heart of the dispute is the distinction between custody services that employ control over customer assets and non-rule tools like Samourai, which help users obscure blockchain transactions using a method called Coinjoin.
According to the motion, Samourai users have always held cryptographic control, and the app simply coordinated transactions that enhance privacy.
Developer Defense cited years of guidance from the Ministry of Finance’s Financial Crime Enforcement Network (FINCEN) that anonymized software providers are not subject to the Gold Sender Rule.
“Fincen never claimed it was a money sending business that must be approved. On the contrary, Fincen consistently advised that businesses and software apps that “accepted” or “send” funds are not “money transfer” businesses.
The defense argues that the Justice Department’s charges mark a sharp and unprecedented break from its interpretation “in the apparent regulatory struggle with Finsen.”
For them, the DOJ’s actions are similar to “charging the shovel maker because the killer may know that they will use the shovel to fill the victim” or “can charge the burner phone maker because some customers may know that they are using the phone to facilitate drug crimes.”
In the allegations, the lawyer warned that DOJ’s theory could involve a wide range of developers building privacy tools.
Several crypto advocacy groups, including the Coin Center and the Defi Education Fund, have expressed interest in filing an Amicus brief to support the motion, warning that lawsuits can cool innovation and could violate civil liberties if allowed to continue.
The court is scheduled to hear the debate on July 22nd.
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