CryptoQuant CEO defends Samourai Wallet founders

CryptoQuant CEO Ki Young Ju has voiced support for the founders of Samourai Wallet after their indictment by the U.S. Department of Justice for allegedly running a crypto mixing service implicated in laundering nearly $100 million.

Ju has defended the crypto mixer‘s role in protecting user privacy and argued against the charges brought against the founders.

Furthermore, Ju highlighted that the way a feature is used and the intent behind deems it as lawful or illicit. He compared the Samourai wallet case the to usage of a knife, which can both be lawful and illegal. The CryptoQuant founder noted, “It’s like punishing the inventor of the knife instead of the one who uses it.

The DoJ has accused the Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill, of designing and operating a service that allegedly facilitated over $100 million in transactions tied to illicit activities

Since its inception in 2015, the service is alleged to have handled about $2 billion in illicit transactions, generating around $4.5 million in fees.

Rodriguez was arrested and is scheduled for arraignment in Pennsylvania, while Hill was detained in Portugal and is awaiting extradition to the U.S. The crackdown extended to seizing the Samourai Wallet website hosted in Iceland and issuing a warrant to remove its mobile application from the Google Play Store.

Evidence from tweets and private messages indicates that the founders actively marketed their service to users looking to launder criminal proceeds. The application, which has amassed over 100,000 downloads, was reportedly targeted towards participants in the black and grey markets, especially during the COVID-19 pandemic.

Lyudmyla Kozlovska, a human rights advocate, also weighed in on the issue, outlining the capabilities of U.S. law enforcement to detect financial crimes involving cryptocurrencies.

Kozlovska also argued against the criminalization of mixing technologies and the developers behind them, adding, “This is exactly what we talk about in our meetings with regulators: we understand that US law enforcement has all the tools to track Bitcoin transactions on the blockchain.”

Meanwhile, The Federal Bureau of Investigation recently warned Americans against using unregistered cryptocurrency money-transmitting services, which might be aimed at smart-contract-driven privacy tools.

In an April 25 public service announcement, the FBI urged Americans only to use registered Cryptocurrency Money Services Businesses that comply with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.

In its announcement, the FBI wrote that it had recently conducted law enforcement operations against cryptocurrency services that were not licensed in “accordance with federal law,” adding that anyone using unlicensed services could “encounter financial disruptions” during law enforcement actions, particularly if the money is intermingled with illegally obtained funds.