17 September 2024
Today, Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill appeared together in court in the Southern District of New York for a status conference.
This was the first time the two made a public appearance together since the US Department of Justice (DoJ) charged the two developers with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business in April 2024. It was also the first time either of them have appeared in court since Hill appeared ahead of his bail release in July and Rodriguez first attended a court hearing in May.
The prosecution addressed the court first, stating that it had produced “voluminous batches of discovery.”
It made the first batch available to the defense in mid-June 2024. This batch featured business records, emails and social media account information amongst other data.
The second batch, which it made available to the defense in mid-August 2024, featured data extractions from the devices that the DoJ seized from the two developers. The DoJ has extracted information from 15 of the 44 devices seized from Rodriguez and 25 of the 27 devices seized from Hill.
The prosecution also stated that it would produce a third batch of discovery containing a “relatively modest” amount of data soon and that it was prepared to proceed with trial.
No Evidence Of Money Transmission
Rodriguez’s attorney made the case that it was premature to set a trial date, as the defense has yet to review all of the discovery made available in mid-August 2024. The defense also said that it has yet to come across any evidence showing that Rodriguez or Hill operated an unlicensed money transmitting business.
Hill’s attorney stated that they’ve received 8 terabytes worth of discovery. To put this amount of data in context, he explained that this was the equivalent of 75% of the amount of information in the Library of Congress and that, if one printed this information, one could stack the paper it was printed on “to the moon and back 22 times,” making the point that it would be hard to sort through and review.
Hill’s attorney also referenced the letter from Senators Cynthia Lummis (R) and Ron Wyden (D) in which the lawmakers stated that the DoJ’s unprecedented interpretation of the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) statute regarding operating an unlicensed money transmitting business contradicts the intent of the rule. For this reason, he proposed a motion to dismiss the charge.
The judge denied this request and scheduled a follow-up hearing for December 17, 2024 at 10 AM ET.
Rodriguez’s Request For Bail Modifications
In the second portion of the conference, Rodriguez’s lawyer requested two modifications to Rodriguez’s bail conditions. He requested that the court remove Rodriguez’s home detention mandate and that the court modify restrictions on Rodriguez’s ability to transact with cryptocurrency, some of which was proceeds from Samourai. (Zack Shapiro, Legal Fellow at the Bitcoin Policy Institute (BPI) later explained to me that the second modification was requested in part so that Rodriguez could use bitcoin proceeds from Samourai to pay for legal fees.)
Rodriguez’s attorney argued that home detention was “unduly restrictive” and “unnecessary,” and that Rodriguez isn’t a flight risk. The defense also cited two instances in which Rodriguez had the opportunity to flee but didn’t in its efforts to make the case that Rodriguez no longer needed to wear a location monitoring device.
The prosecution pushed back, arguing that Rodriguez’s home detention was necessary to ensure that Rodriguez continued to appear for trial. It also stated that the charges being levied against Rodriguez for running a “cryptocurrency money laundering business” were severe and that Rodriguez was potentially facing a potential sentence of up to 25 years.
The prosecution went on to cite evidence from handwritten pages that it had obtained from Rodriguez’s home containing details about how he would flee the country to a jurisdiction from which it would be difficult to extradite him. This information included a list including different passports as well as having $10,000 in cash, a burner phone, an unused SIM card, and various mnemonic phrases for crypto assets amongst other items.
Rodriguez’s lawyer argued that this plan applied to what Rodriguez would do in the case of a more general emergency, while the prosecution argued that this was Rodriguez’s current escape plan.
The prosecution stated that it was “a pretty good plan” and that it doesn’t feel that it’s appropriate to stop monitoring Rodriguez at this time. However, the prosecution did say that it would consider allowing Rodriguez certain freedoms if petitioned, without including any specifics.
The judge didn’t allow for the modification of the bail conditions and asked both the prosecution and the defense to “get moving on the case.”
Donate to the legal defense fund for Rodriguez and Hill via BPI’s P2P Rights Fund.