Crypto mixing services are not a crime, wrote Ki Young Ju, the founder and CEO of CryptoQuant, in response to the recent arrest of the Samourai Wallet founders.
The United States Department of Justice (DOJ) has arrested pioneers in Bitcoin privacy, according to Ki, who wrote in an April 25 X post:
“Privacy stands as a core value of Bitcoin. Mixing itself is not a crime. Even crypto exchanges use mixing to safeguard user privacy. It’s like punishing the inventor of the knife instead of the one who uses it.”
On April 24, Cointelegraph reported that cryptocurrency wallet Samourai Wallet CEO Keonne Rodriguez and chief technology officer William Hill will each face one count of conspiracy to commit money laundering and one count of conspiracy to operate an unlicensed money transmitting business.
The arrest caused widespread concerns in the crypto community, as participants feared that it could signal another U.S. government attempt to crack down on the industry.
NSA whistleblower Edward Snowden called the arrests an attack on financial privacy, in an April 24 X post:
“The Department of ‘Justice’ has once again criminalized the developers of an app that restores financial privacy. The way to fix this is to make money private by default. Privacy must never be ‘exceptional,’ or they will make it criminal.”
The DOJ alleged that Samourai Wallet “executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets.”
Others also perceived the enforcement action as a crackdown on financial privacy from the DOJ, including crypto analyst Ryan Adams, who stated in an April 24 X post:
“These developers face up to 25 years in prison for writing code. The US is sending a message. No transaction will be private.”
This isn’t the first time that authorities are cracking down on privacy-preserving technologies like cryptocurrency mixers.
In August 2023, the U.S. DOJ charged the developers of crypto mixer Tornado Cash with money laundering, sanctions violations, and operating an unlicensed money transfer business.
The three developers, including Alexey Pertsev, were arrested in August 2022, days after the U.S. Treasury sanctioned Tornado Cash for allegedly being used by the North Korean Lazarus Group to launder over a billion dollars worth of crypto.
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