Samourai Wallet Founders Arrested: Crypto Industry Braces for Legal Storm
Samourai Wallet, a privacy-focused Bitcoin wallet, has faced a major legal setback. The founders, Keonne Rodriguez and William Lonergan Hill, were arrested in the US, accused of operating an unlicensed 'money transmitter' and facilitating the laundering of over $100 million. The indictment's broad definition of a 'money transmitter' could have far-reaching implications for the crypto industry in the USA.
Samourai Wallet, established in 2015, aimed to enhance Bitcoin users' privacy. However, the founders knew their software was being used for criminal fund laundering and actively promoted it. The wallet's features, Ricochet and Whirlpool, are now at the centre of the controversy, potentially leading to 20 years in prison for aiding and abetting money laundering in the USA.
The lawsuit also challenges the crypto industry's understanding of the term 'money transmitter'. Samourai is accused of failing to register as one, which could have significant consequences beyond Samourai and other privacy wallets in the USA.
In response, Wasabi Wallet, another privacy-focused wallet, has announced it will block US citizens and residents due to the Samourai lawsuit. Similarly, Phoenix Wallet, a Lightning Wallet, has removed its app from US app stores and advised US users to empty their wallets.
The Samourai Wallet case has sent shockwaves through the crypto industry, with potential implications for privacy-focused wallets and the broader understanding of 'money transmitters' in the USA. As the legal battle unfolds, other wallets are taking precautions to avoid similar issues. The founders of Samourai Wallet await their fate, with the maximum penalty being 20 years in prison in the USA.
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