In a letter sent to a Manhattan federal court on May 9, the prosecution stated that there was no need for the hearing requested by the defendants, adding that all significant communications with FinCEN (Financial Crimes Enforcement Network) were delivered “months in advance of pretrial motions and trial.”

“The defendants will have seven months to evaluate this information before trial. No further action is necessary,” the statement read.

Defendants Claim Critical Information Was Disclosed Late

On May 5, Samourai Wallet co-founders Keonne Rodriguez and William Hill requested a hearing, claiming that FinCEN officials had stated — six months before the charges were filed — that their service was not considered a Money Services Business (MSB) requiring a license. They argued that this information was disclosed too late by the prosecution.

However, in February 2024, prosecutors charged Rodriguez and Hill with operating an unlicensed money transmitting business and conspiracy to launder money, and arrested them in April. Both individuals have pleaded not guilty.

“It Was an Informal Conversation”

The prosecution emphasized that the conversation with Kevin O’Connor, Head of FinCEN’s Virtual Assets and Emerging Technologies Section, and Lorena Valente from the Policy Division, was “informal, individual, and conditional.”

An email sent by a prosecutor following the August 2023 meeting stated that since Samourai does not take custody of crypto assets, “it would strongly suggest that it should not be considered an MSB.” However, it was also noted that FinCEN personnel “did not have a sense of what FinCEN would decide if the matter were brought before the policy committee.”

Samourai’s lawyers argued that this conversation demonstrated that their clients were not considered money transmitters under FinCEN guidance, and therefore could not be prosecuted for operating without a license.

DOJ Memo on Crypto Mixers Also Under Debate

The defendants also referred to an internal Department of Justice memo released in April, as they filed a motion to dismiss the case. The memo stated that crypto mixing services should not be prosecuted for unintentional regulatory violations.

However, the prosecution objected to the relevance of the memo in a letter to the court, arguing that the document explicitly states that it “may not be relied upon to create any right or benefit” against the U.S. government or its departments.

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