DOJ – Earlybirds Invest https://earlybirdsinvest.com Latest Crypto News Sat, 13 Sep 2025 11:51:30 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.9 https://i0.wp.com/earlybirdsinvest.com/wp-content/uploads/2024/12/cropped-New-Project-2024-12-17T235703.455.png?fit=32%2C32&ssl=1 DOJ – Earlybirds Invest https://earlybirdsinvest.com 32 32 240146708 DOJ to Seize $584,000 USDT From Iran-Based Drone Tech Provider https://earlybirdsinvest.com/doj-to-seize-584000-usdt-from-iran-based-drone-tech-provider/ https://earlybirdsinvest.com/doj-to-seize-584000-usdt-from-iran-based-drone-tech-provider/#respond Sat, 13 Sep 2025 11:51:30 +0000 https://earlybirdsinvest.com/doj-to-seize-584000-usdt-from-iran-based-drone-tech-provider/

Federal officials in Massachusetts have started a legal process to seize roughly $584,741 in Tether
USDT


$0.9982

from an Iranian citizen.

The man is accused of helping Iran’s military with technology support. According to a submitted filing, the funds were kept in a private crypto wallet that is not managed by any financial service or exchange.

The individual named in the case is Mohammad Abedini. He is known for founding a company in Iran called San’at Danesh Rahpooyan Aflak Co. (SDRA). This company is said to have supplied navigation equipment to a drone maker in Iran.

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US prosecutors accused Abedini of trying to acquire restricted American-made technology and sharing it with groups classified as foreign terrorist organizations.

The Department of Justice said he was arrested in Italy in late 2024 but was freed the next month.

An independent group called Iran Watch has also released reports about Abedini. They claimed that from 2016 to 2024, he and a partner moved small electronic parts, originally made in the United States, into Iran. The process allegedly involved shipping the items through Switzerland.

The current legal case does not focus on sending Abedini to prison but instead aims to take control of the crypto assets linked to him. The Justice Department noted that the funds are connected to illegal trade activity.

Recently, ​two men were arrested in Hong Kong for running hidden crypto mining rigs using care home electricity. How did the case unfold? Read the full story.


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DOJ Targets $12 Million in USDT From Scam Site Posing as Crypto Exchange https://earlybirdsinvest.com/doj-targets-12-million-in-usdt-from-scam-site-posing-as-crypto-exchange/ https://earlybirdsinvest.com/doj-targets-12-million-in-usdt-from-scam-site-posing-as-crypto-exchange/#respond Thu, 11 Sep 2025 07:28:32 +0000 https://earlybirdsinvest.com/doj-targets-12-million-in-usdt-from-scam-site-posing-as-crypto-exchange/

US federal prosecutors are taking legal steps to claim over $12 million in Tether
USDT


$0.9994

that came from a fraudulent online investment scheme.

The funds were traced to digital wallets tied to a fake trading platform, according to a civil complaint filed on September 5 in Albany and publicly confirmed on September 9.

The Department of Justice stated that the platform lured people into depositing money outside of its main interface.

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The case outlines how those behind the scam used messaging apps to initiate contact and build trust before directing victims toward the fake exchange.

According to the filing, ten people who spoke Mandarin were first contacted through random text messages. These interactions shifted toward conversations about investing, which eventually pointed victims to a fraudulent website called ShakepayEX.

The website mimicked the design of a real Canadian exchange, which makes it seem reliable.

Once users sent their money in, they could not withdraw it. The scammers gave excuses like additional fees or new requirements, and continued asking for more money. Investigators said these tactics resulted in total losses exceeding $10 million.

Prosecutors noted that the case shows how civil forfeiture can be used to freeze stablecoin funds quickly. With help from companies like Tether, the US government is working to block such funds on-chain.

Acting US Attorney Sarcone described crypto investment fraud as a growing threat. He noted that people across the country are being targeted by schemes that operate internationally.

Recently, the US Treasury Department sanctioned individuals and groups from North Korea, Russia, and China. What happened? Read the full story.


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Top DOJ official alleges Epstein cover-up in secret recording https://earlybirdsinvest.com/top-doj-official-alleges-epstein-cover-up-in-secret-recording/ https://earlybirdsinvest.com/top-doj-official-alleges-epstein-cover-up-in-secret-recording/#respond Fri, 05 Sep 2025 18:52:35 +0000 https://earlybirdsinvest.com/top-doj-official-alleges-epstein-cover-up-in-secret-recording/

A secretly recorded conversation with a top Department of Justice (DOJ) official accuses Pam Bondi and the DOJ of a massive cover-up in the Jeffrey Epstein case.

Joseph Schnitt, the Acting Deputy Chief of the Office of Enforcement Operations, was covertly recorded by Project Veritas founder James O’Keefe during what Schnitt believed was a private date arranged through a dating app. In the hidden camera footage, Schnitt made a series of explosive claims that the DOJ has since denied.

During the recorded meeting, Schnitt alleged that the DOJ was planning to manipulate the release of documents related to Jeffrey Epstein’s case. He claimed that “thousands and thousands of pages” of files exist and that the department would “redact every Republican or conservative person in those files, leaving all the liberal, Democratic people intact.”

Schnitt’s comments didn’t stop there. He also discussed the transfer of Ghislaine Maxwell to a minimum-security prison. “She got transferred to a minimum security prison. It’s against BOP [Bureau of Prisons] policy because she’s a convicted sex offender. And they’re not supposed to get minimum security prisons, which is an interesting detail because she’s getting a benefit, which means they’re offering her something to keep her mouth shut.”

He also told his date that the FBI’s Kash Patel and Dan Bongino are clashing with Attorney General Pam Bondi over the suppression of the files:

“The head of FBI [Kash Patel] really wants to… second-in-command [Dan Bongino] at FBI has been causing problems, because he’s like, ‘No, these [Epstein Files] have to be released.’ The FBI wants them out. The top two guys that will do it. But they work for Bondi, so… Bondi wants whatever Trump wants. Internally there’s a lot of conflict.”

The Department of Justice confirmed the authenticity of the video but stated that Schnitt “had no role in the Department’s internal review of Epstein materials,” and his comments “have absolutely zero bearing with reality and reflect a total lack of knowledge of the DOJ’s review process.” To back up its claims, the DOJ tweeted a screenshot of a note that Shnitt ostensibly sent to his boss at the DOJ, Acting Director Jeffrey Pollak, about his date:

Acting Director Pollak:

I met a woman named Skylar on Hinge, a dating app, in July 2025, her profile is no longer findable. We had two dates (August 4 and August 16). She claimed to be an au pair in Georgetown. She gave no clues that she was a reporter or recording our dates. Had la clue, the first date would have ended immediately and there never would have been a second one. My profile indicated I did “Government” work but did not specify for which agency. I never discussed what I do at DOJ.

The comments I made were my own personal comments on what l’ve learned in the media and not from anything l’ve done at or learned via work. I have no knowledge of the circumstances surrounding Ms. Maxwell other than what is reported in the news. I also never divulged anything about what I do at work. I recall that she asked if I had any knowledge about Maxwell and I specifically said I only know what’s been reported in the media.

Joseph Schnitt,
A/Deputy Chief Special Operations Unit
Office of Enforcement Operations

It makes one wonder. Schnitt holds a senior position within the DOJ, yet his comments were dismissed as “misunderstanding and lack of factual basis.” What information remains hidden in the Epstein case, and who might be protected by continued secrecy? The DOJ doesn’t want us to find out.

Previously:
• Documents reveal decades-long Trump-Epstein relationship despite denials

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DOJ Hints No Second Trial for Tornado Cash Co-Founder Roman Storm https://earlybirdsinvest.com/doj-hints-no-second-trial-for-tornado-cash-co-founder-roman-storm/ https://earlybirdsinvest.com/doj-hints-no-second-trial-for-tornado-cash-co-founder-roman-storm/#respond Sat, 23 Aug 2025 09:52:05 +0000 https://earlybirdsinvest.com/doj-hints-no-second-trial-for-tornado-cash-co-founder-roman-storm/

The Department of Justice (DOJ) has hinted that Tornado Cash co-founder Roman Storm is unlikely to face a second trial on new charges.

Storm was convicted on one felony count in August, but the latest comments from Matthew Galeotti, the acting assistant attorney general in charge of the criminal division, suggested a narrower focus on intent in crypto-related prosecutions.

Speaking at a Wyoming event hosted by the American Innovation Project, Galeotti outlined how the department plans to approach enforcement in the crypto industry. He said the goal was to bring more clarity and predictability to developers and businesses.

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Although he did not mention Storm directly, Galeotti described cases that closely resemble Storm’s, including disputes over whether someone’s work amounts to operating an unlicensed money-transmission business. He said:

Innovating new ways for the economy to store and transmit value and create wealth, without ill intent, is not a crime.

Still, he explained that the DOJ will still go after people who break the law or help others commit crimes such as fraud, money laundering, or evading sanctions.

He also noted, “The department will not use federal criminal statutes to fashion a new regulatory regime over the digital asset industry. The department will not use indictments as a law-making tool. The department should not leave innovators guessing as to what could lead to criminal prosecution”.

Recently, Federal Reserve Governor Christopher Waller spoke about how banks and policymakers should approach crypto-based payments at the conference. What did he say? Read the full story.


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Trump DOJ corruption? Fired aide alleges payments for merger approvals. https://earlybirdsinvest.com/trump-doj-corruption-fired-aide-alleges-payments-for-merger-approvals/ https://earlybirdsinvest.com/trump-doj-corruption-fired-aide-alleges-payments-for-merger-approvals/#respond Wed, 20 Aug 2025 21:26:21 +0000 https://earlybirdsinvest.com/trump-doj-corruption-fired-aide-alleges-payments-for-merger-approvals/

A former Trump Justice Department appointee blasted some of his ex-colleagues in a speech Monday, saying they “perverted justice and acted inconsistent with the rule of law” — and he named names.

Roger Alford was a top appointee in the DOJ’s antitrust division in both President Donald Trump’s first and second terms. He and his boss, DOJ antitrust division chief Gail Slater, are associated with a faction on the right that wants tougher antitrust enforcement. They take a more skeptical view of mergers in sectors where only a few major companies are competing.

But Alford was fired last month. And now, he’s gone public about what happened, outlining what he said amounted to a “pay-to-play” scandal, where companies paid well-connected outside MAGA influencers to try to get mergers approved, and certain top DOJ officials played ball.

“For 30 pieces of silver, MAGA-in-Name-Only lobbyists are influencing their allies within the DOJ and risking President Trump’s populist conservative agenda,” Alford said. “Their goal is to line their own pockets by working for any corporation that will pay top dollar to settle antitrust cases on the cheap.”

“Perverted justice and acted inconsistent with the rule of law”

Though Alford didn’t have anything negative to say about Trump or Attorney General Pam Bondi, he pointed the finger at two officials in particular: Bondi’s chief of staff, Chad Mizelle, and Associate Attorney General nominee Stan Woodward.

Mizelle “makes key decisions depending on whether the request or information comes from a MAGA friend,” Alford said. He continued: “Aware of this injustice, companies are hiring lawyers and influence peddlers to bolster their MAGA credentials and pervert traditional law enforcement.”

The background to this is that back in January, shortly after Trump was sworn in, the DOJ’s antitrust team sued to block IT company Hewlett Packard Enterprise from buying a rival, Juniper Networks.

But in June, DOJ suddenly backed off, agreeing to a settlement that let the deal proceed with minor concessions.

This, Alford clearly believes, was because Hewlett Packard hired two outside MAGA figures to grease the wheels for them: Mike Davis (a conservative legal activist) and Arthur Schwartz (a longtime ally of Donald Trump Jr.).

“Mike Davis and Arthur Schwartz have made a Faustian bargain of trading on relationships with powerful people to reportedly earn million-dollar success fees by helping corporations undermine Trump’s antitrust agenda, hurt working class Americans, break the rules, and then try to cover it up,” Alford said in his speech.

Alford didn’t go into all the details about what happened, but Semafor has reported that Mizelle overruled Slater and Alford to push through the Hewlett Packard settlement — and Alford was fired soon afterward. (The drama spilled out into public, and even Laura Loomer got involved, as the antimonopoly advocate Matt Stoller has chronicled.)

Urging a judge reviewing the merger to dig into the matter more, Alford’s speech continued: “It is my opinion that in the HPE/Juniper merger scandal, Chad Mizelle, and Stanley Woodward perverted justice and acted inconsistent with the rule of law. I am not given to hyperbole, and I do not say that lightly.”

A DOJ spokesperson pushed back in a statement: “Roger Alford is the James Comey of antitrust — pursuing blind self-promotion and ego, while ignoring reality. He was fired from the Department, and all should treat his comments for what they are — the delusional musings of a disgruntled ex.”

What this is really all about

Over the past decade, a new antitrust movement skeptical of Big Tech and big corporations generally has gained some traction on both the left and right. Joe Biden’s FTC chair, Lina Khan, became the face of this movement for Democrats, and certain up-and-coming Republicans seeking a populist brand, such as JD Vance, professed admiration for her.

Most Republicans, though, loathed Khan, sympathizing with complaints from business leaders that she was overly scrutinizing mergers, and took the GOP’s traditional pro-corporate line.

When Trump won his second term, though, he nominated a Vance staffer, Gail Slater, as his DOJ antitrust chief. Antitrust reformers like Stoller liked Slater and took her appointment as an encouraging sign that “Trump wants to take on big tech.”

In practice, though, Trump’s administration has been most defined by its weaponization of government for shakedown tactics. Trump likes deals, and he likes getting companies (or universities) to cough up money. He likes it when people ask him for favors, and he likes asking for things from them in return. He was never truly committed to an ideological agenda of tough antitrust enforcement. And he’s fine with Big Tech, so long as Big Tech gives him what he wants.

Slater and Alford apparently didn’t get the memo and thought they’d have a free hand to enforce the law as they felt appropriate. But this earned them enemies inside and outside the administration, CBS News reported last month. There were deals to be had — and money to be made.

In his speech, Alford referred to “people inside and outside government” who “consider law enforcement not as binding rules but an opportunity to leverage power and extract concessions.”

But though Alford put the blame on those two DOJ officials, his description seems to fit Trump’s approach to governance quite well.

We don’t know whether Trump himself got involved in the Hewlett Packard matter. But, as the saying goes, the Cossacks work for the Czar.

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US DOJ With a Bounty Totaling Up to $6M For Defunct Exchange Garantex Leaders https://earlybirdsinvest.com/us-doj-with-a-bounty-totaling-up-to-6m-for-defunct-exchange-garantex-leaders/ https://earlybirdsinvest.com/us-doj-with-a-bounty-totaling-up-to-6m-for-defunct-exchange-garantex-leaders/#respond Mon, 18 Aug 2025 03:24:28 +0000 https://earlybirdsinvest.com/us-doj-with-a-bounty-totaling-up-to-6m-for-defunct-exchange-garantex-leaders/

United States authorities have unveiled a massive reward for any information provided regarding the management members of the Garantex crypto exchange.

After operating for years and facilitating billions of transactions involving cybercriminals, the now rebranded entity is under heavy fire.

Substantial Reward

The Office of the Spokesperson for the US Department of State issued a statement yesterday, announcing that it is targeting the now-obsolete Russian cryptocurrency exchange Garantex, which was allegedly used by a variety of criminals carrying out cybercrime and money laundering within its network.

The department’s Transnational Organized Crime Rewards Program (TOCRP) has prepared two rewards, totaling up to $6 million, for any information that leads to the arrest or conviction of Garantex executives. This is split between up to $5M for Russian national Aleksandr Mira Serda, co-owner and CCO, and up to $1 million for other key leaders of the exchange.

OFAC, the Treasury’s Office of Foreign Assets Control, is taking steps to redesignate Garantex and designate its successor, Grinex, which remains operational. This followed Tether’s interference, which involved blocking wallets associated with the exchange and seizing USDT assets earlier this year.

German and Finnish authorities also aided by seizing their domain and freezing over $26 million in digital assets controlled by Garantex. OFAC will also be naming three executives from the exchange and six affiliated companies in Russia and the Kyrgyz Republic.

As per reports from the FBI and U.S. Secret Service, between April 2019 and March 2025, the exchange processed at least $96 billion in crypto transactions. It also received hundreds of millions in proceeds from the criminals using it to carry out a range of crimes, including terrorism, drug trafficking, ransoms, and others, oftentimes, causing significant harm to victims from the United States.

Known Facts

Garantex was founded at the end of 2019 and registered in Estonia. Most of its operations were conducted from Moscow and St. Petersburg. In February 2022, it lost its license for providing digital asset services after Estonia’s Financial Intelligence Unit (EFIU) unveiled serious deficiencies in its laws against money laundering and terrorist financing, as wallets linked to criminal activity were discovered.

After the EFIU enforcement and OFAC’s designation, the exchange created an infrastructure designed to prevent institutions from accrediting wallet addresses back to them, in an attempt to evade sanctions. This allowed them to continue providing services to various entities involved in criminal activities.

A known money launderer, Ekaterina Zhdanova, has reportedly funneled over $2 million in Bitcoin to the USDT stablecoin using the exchange. She is currently being pursued under an executive order from November 2023 for conducting financial operations or services in the world’s largest country.

In March 2025, the US DOJ unsealed indictments against the CCO and Aleksej Besciokov, a known executive. Following this, the latter was arrested in India, while the former remains at large.

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US DOJ could still pursue money laundering, sanctions charges against Roman Storm https://earlybirdsinvest.com/us-doj-could-still-pursue-money-laundering-sanctions-charges-against-roman-storm/ https://earlybirdsinvest.com/us-doj-could-still-pursue-money-laundering-sanctions-charges-against-roman-storm/#respond Wed, 06 Aug 2025 21:40:53 +0000 https://earlybirdsinvest.com/us-doj-could-still-pursue-money-laundering-sanctions-charges-against-roman-storm/

The US government can still retry Tornado Cash developer Roman Storm on counts of money laundering and violating sanctions due to a hung jury, according to attorneys.

“The Department of Justice (DOJ) will decide in the coming days if it wants to retry those charges in a new trial,” Jake Chervinsky, chief legal officer at venture capital firm Variant Fund, wrote on X.

Storm was convicted on one felony count for his involvement with Tornado Cash on Wednesday. The jury found him guilty of conspiracy to operate an unlicensed money transmitting business.

However, jury members did not reach a unanimous verdict on the charges of conspiracy to commit money laundering and conspiracy to violate North Korea sanctions.

Law, Privacy, US Government, Court, Sanctions, Money Laundering, Tornado Cash
Source: Jake Chervinsky

Attorney Aaron Brogan told Cointelegraph that Storm’s verdict still carries broader legal implication for decentralized protocols.

“The problem with this broad application of federal money transmitter law is that, frankly, many in DeFi worry they could apply as strongly to them as to Tornado Cash. And while the government probably won’t bring charges against all of DeFi, the broad exposure gives them a powerful stick in any negotiations.”

The case’s potential for lasting implications has drawn close attention from the crypto industry and privacy advocates. Attorneys say the precedent-setting trial is critical for digital privacy and could have a significant impact on open-source software developers in the United States.

Related: SEC’s Peirce defends transaction privacy as Tornado Cash verdict looms

Attorneys react to the partial verdict

The US can still bring Roman Storm back to court on the unresolved charges of conspiracy to commit money laundering and conspiracy to violate North Korea sanctions. The decision would depend on several factors, including the likelihood of securing a conviction in a second trial.

“If the Trump administration wants the USA to be the crypto capital of the world, then the DOJ must not be allowed to retry the two deadlocked charges,” Chervinsky said.

Chervinsky described the partial verdict as “a sad day for DeFi,” warning that section 1960 under the US Code, which prosecutors used to charge Storm with operating an unlicensed money transmitting business, represents an existential threat to decentralized finance applications.

“All in all, this leads to a pretty depressing conclusion,” attorney Zack Shapiro wrote on X, but said that it was good the “draconian” prison sentences for the money laundering charges were off the table for now.

Law, Privacy, US Government, Court, Sanctions, Money Laundering, Tornado Cash
Source: Zack Shapiro

I think it’s reasonable to conclude that the government might not retry the mistried counts of money laundering given the political posturing

A US court overturned the Tornado Cash sanctions in January 2025, handing decentralized crypto and privacy-preserving protocols a major legal victory.

The sanctions were imposed by the US Office of Foreign Assets Control (OFAC) in 2022, accusing the crypto mixing service of money laundering.

DOJ officials claimed the Tornado Cash protocol helped launder over $7 billion in crypto between 2019 and 2022 and was instrumental to North Korean state-sanctioned hackers laundering funds stolen through hacking.

Magazine: Tornado Cash 2.0: The race to build safe and legal coin mixers

]]> https://earlybirdsinvest.com/us-doj-could-still-pursue-money-laundering-sanctions-charges-against-roman-storm/feed/ 0 51860 Scammer Steals $507,916 From US Benefits Program, Leaving Dozens of Families in Financial Ruin: DOJ https://earlybirdsinvest.com/scammer-steals-507916-from-us-benefits-program-leaving-dozens-of-families-in-financial-ruin-doj/ https://earlybirdsinvest.com/scammer-steals-507916-from-us-benefits-program-leaving-dozens-of-families-in-financial-ruin-doj/#respond Wed, 06 Aug 2025 12:50:44 +0000 https://earlybirdsinvest.com/scammer-steals-507916-from-us-benefits-program-leaving-dozens-of-families-in-financial-ruin-doj/

A 39-year-old Romanian man has pleaded guilty to stealing more than $500,000 from a US government benefits program and other crimes.

According to the Northern District of California’s U.S. Attorney’s Office, Marius Marian stole $507,916 in Electronic Benefits Transfer (EBT) funds from those who rely on the money to cover basic expenses.

He also pleaded guilty to illegally reentering the United States following an aggravated felony conviction and making false statements on his asylum application.

Beginning in March 2024, Marian fraudulently obtained EBT funds by using over 601 unique victim EBT account identifiers. EBT benefits are federal funds distributed through the California Department of Social Services to low-income individuals to use for such things as food, rent, childcare and medical expenses.

Marian used skimmer devices on ATM and point-of-sale machines to capture the victims’ EBT card numbers when the victims used the cards. He then encoded the stolen EBT account information on counterfeit bank cards and used them to fraudulently withdraw EBT funds from ATMs in Northern California.

“As a result of his scheme, Marian withdrew $507,916 in cash and intended to withdraw $611,845 in EBT funds. Marian further admitted that his conduct involved sophisticated means and caused substantial financial hardship to at least 25 victims.

Additionally, Marian admitted that on or around April 27, 2023, he knowingly submitted false statements on an application for asylum to the U.S. Department of Homeland Security. Specifically, Marian knowingly failed to disclose in his asylum application that he had been previously deported from the United States and that he had previously been convicted in 2019 of bank fraud.

Finally, Marian acknowledged that he had been previously deported after his 2019 conviction for bank fraud and that he thereafter illegally reentered and was found in the United States.”

For theft of the EBT funds, Marian pleaded guilty to one count of bank fraud, which carries a sentence of up to 30 years in prison. The illegal entry into the US charge carries a sentence of up to 10 years in prison, while the asylum fraud charge carries a sentence of up to 20 years in prison.

Marian is due back in court for sentencing on October 20th.

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Samourai Wallet founders plead guilty to unlicensed money transmission; DOJ drops laundering, conspiracy charges https://earlybirdsinvest.com/samourai-wallet-founders-plead-guilty-to-unlicensed-money-transmission-doj-drops-laundering-conspiracy-charges/ https://earlybirdsinvest.com/samourai-wallet-founders-plead-guilty-to-unlicensed-money-transmission-doj-drops-laundering-conspiracy-charges/#respond Fri, 01 Aug 2025 00:50:27 +0000 https://earlybirdsinvest.com/samourai-wallet-founders-plead-guilty-to-unlicensed-money-transmission-doj-drops-laundering-conspiracy-charges/

The developers behind Samourai Wallet pleaded guilty to a single count of conspiracy to operate an unlicensed money‑transmitting business.

The plea deal secures dismissal of the parallel money laundering conspiracy charge and caps potential prison time at five years. It also includes $237 million in forfeiture and a $400,000 fine.

As journalist Matthew Russell Lee reported on July 30, sentencing is set for November 6. Additionally, the defendants agreed not to appeal if the sentence is five years or less, according to Bitcoin Policy Institute’s head of policy, Zack Shapiro.

Plea deal

Lee reported that Judge Jed Rakoff pressed Keonne Rodriguez to state his criminal conduct “in his own words.”

Rodriguez told the court that his role at the firm meant that he was aware users were using the wallet “to launder criminals’ money.” Prosecutors argued that the knowledge alone is sufficient for a 60 month sentence even if they were not involved in the laundering.

Shapiro noted that had both counts gone to verdict, combined federal guidelines would have pointed to 160 to 210 months. By pleading to the unlicensed transmission conspiracy under 18 U.S.C. § 1960, the developers face a statutory maximum of five years rather than a potential decade-plus exposure.

Defense‑side reaction framed the outcome as a pragmatic hedge rather than a legal endorsement of the US Department of Justice’s (DOJ) theory.

Amanda Tuminelli, executive director and CLO at the DeFi Education Fund argued that the DOJ “misinterprets Section 1960 whenever they accuse a non‑custodial software dev of ‘transferring funds on behalf of the public,’”

Tuminelli added that the pleas don’t change the policy fight over how the law should apply to open‑source wallet software. She said:

“Plea deals are risk calculations.”

Case background

US and international authorities shuttered Samourai on April 24, seizing its domain and web infrastructure in collaboration with the Icelandic and Portuguese police, the IRS, the FBI, and Europol.

The authorities also issued a warrant that removed the Android app from Google Play for US users.

Prosecutors alleged founders Keonne Rodriguez and William Lonergan Hill ran a mixing service through Samourai that processed more than $2 billion in Bitcoin tied to illicit activity, including $100 million linked to dark‑web markets. 

The app, one of the best‑known privacy‑focused Bitcoin wallets, had been downloaded over 100,000 times.

Mentioned in this article
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DOJ clarifies Dragonfly is not a target as Tornado Cash co-founder trial nears conclusion https://earlybirdsinvest.com/doj-clarifies-dragonfly-is-not-a-target-as-tornado-cash-co-founder-trial-nears-conclusion/ https://earlybirdsinvest.com/doj-clarifies-dragonfly-is-not-a-target-as-tornado-cash-co-founder-trial-nears-conclusion/#respond Wed, 30 Jul 2025 22:42:19 +0000 https://earlybirdsinvest.com/doj-clarifies-dragonfly-is-not-a-target-as-tornado-cash-co-founder-trial-nears-conclusion/

Dragonfly managing partner Haseeb Qureshi revealed that the U.S. Department of Justice (DOJ) will not bring criminal charges against the crypto venture firm, as Tornado Cash co‑founder Roman Storm’s federal trial in Manhattan neared its conclusion.

Qureshi, whose investment firm backed several blockchain startups, wrote on social media that federal prosecutor Nathan Rehn told the court July 28 that neither Dragonfly nor its principals were targets of the department’s investigation.

He called the public clarification “unprecedented” and “a clear violation of DOJ policy,” citing the Justice Department’s usual practice of keeping target information confidential. The development comes days after Qureshi publicly denounced the DOJ over targeting the firm for backing Tornado Cash in 2020 as part of Storm’s trial.

Storm, who co‑founded Tornado Cash in 2019 as an open‑source protocol to anonymize cryptocurrency transactions, is charged with laundering more than $1 billion and violating U.S. sanctions against North Korea’s Lazarus Group.

The trial, which began July 14 in U.S. District Court in Manhattan, has heard testimony from blockchain tracing experts and former Tornado Cash users. Closing arguments are expected later this week.

Tornado Cash was added to the U.S. Treasury Department’s sanctions list in August 2022, marking the first time a software protocol faced such action. Prosecutors allege Storm personally approved transactions for illicit actors, while defense attorneys argue that the protocol’s code, not its creator, should be judged.

Dragonfly invested in Tornado Cash in 2020 after obtaining an outside legal opinion that the mixer complied with U.S. anti‑money‑laundering guidance issued by the Financial Crimes Enforcement Network (FinCEN).

The outcome of Storm’s case could reshape how open‑source developers are held accountable for user activity. If convicted, Storm faces up to 45 years in prison, a sentence that critics warn could chill innovation in privacy‑enhancing tools.

Qureshi wrote:

“With that behind us, the focus should remain on Roman Storm’s trial, which is now nearing closing arguments as soon as this week. Its outcome will have massive implications for open-source software and privacy rights in America.”

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