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Lawyers for Samourai Wallet person accused the prosecution of suppressing captious grounds successful its lawsuit against the mixing service’s co-founders, calling for a proceeding to find whether the lawsuit should present beryllium tossed retired successful airy of the alleged Brady violation.
In a Monday tribunal filing, lawyers for Samourai Wallet told Judge Richard Berman of the Southern District of New York (SDNY) that successful August 2023 — six months earlier prosecutors charged Keonne Rodriguez and William Lonergan Hill with 1 number each of conspiracy to perpetrate wealth laundering and conspiracy to run an unlicensed wealth transmitting concern — the Financial Crimes Enforcement Network (FinCEN) told prosecutors that, nether their guidelines, Samourai Wallet didn’t suffice arsenic a wealth transmitting concern and did not request a licence to operate.
Prosecutors went up and charged Rodriguez and Hill anyway, and did not archer either the tribunal oregon Samourai Wallet’s lawyers astir their connection with FinCEN until April 1, 2025 erstwhile responding to the defense’s circumstantial Brady petition for “any accusation suggesting that Samourai Wallet did not necessitate a wealth transmitter licence oregon that the Defendants did not judge that it required specified a license, including but not constricted to communications with the Treasury Department oregon FinCEN," the defence attorneys wrote.
“The information that FinCEN took the aforesaid presumption regarding Samourai Wallet and conveyed it to these aforesaid prosecutors, and that the prosecutors nevertheless charged the Defendants with committing a transgression is shocking,” Samourai Wallet’s lawyers wrote successful their filing.
Under the landmark Supreme Court lawsuit Brady v. Maryland successful 1963, the tribunal held that the authorities indispensable manus implicit immoderate exculpatory oregon worldly grounds — essentially, thing suggesting that the suspect is not, successful fact, blameworthy — to the defence successful a timely manner. Brady violations are considered a usurpation of the defendant’s owed process, and are often grounds for a lawsuit to beryllium thrown out. Notably, a judge tossed retired the involuntary manslaughter lawsuit against American histrion Alec Baldwin past twelvemonth aft it was revealed mid-way done his proceedings that prosecutors had failed to crook implicit exculpatory evidence.
Samourai Wallet’s lawyers told the tribunal that the government’s nonaccomplishment to disclose its pre-indictment consultation with FinCEN has already prejudiced Rodriguez and Hill’s case.
“For instance, the information that the regulator issuing licenses for wealth transmitting businesses did not judge Samourai Wallet needed 1 could good person impacted (i) the Magistrate Judge’s presumption of the spot of the Government’s lawsuit successful making bail determinations that person confined Mr. Rodriguez to his location for astir a twelvemonth and chopped some Defendants disconnected from funds that could beryllium utilized to equine their defense; and (ii) this Court’s determination not to licence the Defendants to record a question to disregard instantly pursuing their arraignments," the filing said.
Last month, lawyers for Samourai Wallet asked the tribunal to flip retired the lawsuit nether the auspices of the alleged “Blanche Memo” — a caller memo from U.S. Deputy Attorney General Todd Blanche to Department of Justice (DOJ) staff, ordering them to halt prosecuting regulatory violations involving crypto, and to nary longer prosecute cases against crypto exchanges oregon mixers for the actions of their extremity users.
Prosecutors met with the defence to see the petition connected April 10 and person inactive not reached a decision astir a period later. If the DOJ declines to driblet charges, lawyers for Samourai Wallet said successful their missive to the tribunal that they would record a question to disregard the lawsuit connected respective grounds, including that the defendants were not wealth transmitters, and frankincense “could not perchance beryllium prosecuted for not having a licence and not implementing anti-money laundering controls.”
However, owed to the grounds that was allegedly withheld, Samourai Wallet’s lawyers argued that “even if the Justice Department’s mentation of the instrumentality — and not the main regulator’s — was correct, the Defendants would inactive beryllium entitled to dismissal for deficiency of just notice. Instead, they person spent a twelvemonth of their lives nether indictment and immense portions of their beingness savings defending themselves against these fundamentally unfair charges.”
The adjacent proceeding successful the lawsuit is slated for July 22, 2025 astatine 1:00 p.m. ET.
FinCEN did not respond to CoinDesk’s petition for comment.
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