Today, Samourai wallet developers Keon Rodriguez and William Lonergan Hill appeared together for a status conference in court for the Southern District of New York.
I attended the status conference #samurai The case from today @bitcoinmagazine,
The circumstances are as follows: pic.twitter.com/MGVlV6LnJK
— Frank Corva (@frankcorva) September 17, 2024
This was the first time the two appeared in public together after the notification issued by the US Department of Justice (DOJ). Two developers charged They are scheduled to be tried on charges of conspiring to commit money laundering and operating an unlicensed money transmitting business in April 2024. It was also the first time either of them appeared in court, as Hill appeared before his bail release in July and Rodriguez first attended a court hearing in May.
The prosecution first addressed the court, saying it had conducted a “vast amount of investigation.”
It made the first batch available to Defence in mid-June 2024. This batch included business records, emails, and social media account information, among other data.
The second batch, which it made available to the defense in mid-August 2024, included data extraction from devices that the Justice Department seized from two developers. The Justice Department has extracted information from 15 of the 44 devices seized from Rodriguez and 25 of the 27 devices seized from Hill.
The prosecution also said it would soon present a third batch of discovery containing a “relatively modest” amount of data and that it was ready to prosecute.
No proof of funds transfer
Rodriguez’s lawyer said it was too early to set a trial date, as the defense has yet to review all evidence provided by mid-August 2024. The defense also said they have not yet found any evidence that shows Rodriguez or Hill operated an unlicensed money transfer business.
Hill’s lawyer said they had received 8 terabytes of discovery. To put this amount of data into context, he explained that it was equivalent to 75% of the amount of information held in the Library of Congress and that if someone printed out this information, they could stack that paper “to the moon and back 22 times,” making the point that it would be difficult to sort through and review.
Hill’s lawyer also referenced this Letter from Senators Cynthia Lummis (R) and Ron Wyden (D) In which the lawmakers said that the DoJ’s unprecedented interpretation of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) Act in the case of running an unlicensed money transmitting business is contrary to the intent of the rule. For this reason, they introduced a motion to dismiss the charge.
The judge denied this request and scheduled a follow-up hearing on December 17, 2024 at 10 a.m. ET.
Demand for modification in Rodriguez’s bail
In the second part of the conference, Rodriguez’s counsel requested two modifications to Rodriguez’s bail conditions. He requested that the Court lift Rodriguez’s house arrest order and that the Court modify restrictions on Rodriguez’s ability to transact with cryptocurrencies, some of which were proceeds from Samourai. (Jack Shapiro, Legal Fellow, The Daily Telegraph) Bitcoin Policy Institute (BPI) (He later told me the second amendment was requested in part so Rodriguez could use bitcoin proceeds from Samourai to pay legal fees.)
Rodriguez’s attorney argued that the house arrest was “overly restrictive” and “unnecessary,” and that Rodriguez was not a flight risk. The defense also cited two instances in which Rodriguez had the opportunity to escape but failed to do so, in order to prove that Rodriguez no longer needed to wear a location monitoring device.
The prosecution argued that it was necessary to keep Rodriguez under house arrest so that Rodriguez could have a chance to appear at trial. It also said that the charges against Rodriguez for running a “cryptocurrency money laundering business” were serious and that Rodriguez could potentially face up to 25 years in prison.
The prosecution cited evidence from handwritten pages recovered from Rodriguez’s home that detailed how he would flee the country to a jurisdiction from which he would be difficult to extradite. This information included various passports as well as $10,000 in cash, a burner phone, an unused SIM card, and a list of various mnemonic phrases for crypto assets, among other items.
Rodriguez’s attorney argued that the plan applied to what Rodriguez would do in a more general emergency situation, while the prosecution argued that it was Rodriguez’s current escape plan.
The prosecution said it was “a very good plan” and that it did not think it was appropriate to end monitoring Rodriguez at this time. However, the prosecution said it would consider granting Rodriguez some freedoms if a plea was filed, without giving specifics.
The judge did not allow any modification of the bail conditions and asked both the prosecution and defence to “proceed with the case”.
Donate to the legal defense fund for Rodriguez and Hill BPI’s P2P Rights Fund,
