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The President confirmed that he is reviewing the case of Keonne Rodriguez. He directed Attorney General Pam Bondi, just days before Rodriguez reported to prison, to review the file.
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The Samourai Wallet founder faces a deadline of Friday to begin a sentence of five years for operating an unlicensed business.
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This review challenges the controversial DOJ position that writing privacy codes for non-custodial parents is a financial crime.
Donald Trump announced on Monday that he will examine the case Keonne Rodriguez, co-founder and owner of the Bitcoin privacy wallet Samourai.
The comments came shortly after Trump was questioned about the possibility of clemency at an afternoon event held at the White House.
The president confirmed he was aware of the case and said that it would be reviewed further. During the exchange, Trump called the attention of US Attorney General Pam Bondi.
Rodriguez was sentenced to five years federal prison last month. He is expected to report to prison this Friday. His sentence is related to an accusation of conspiracy to operate a money-transfer business without a license.
The Samourai Wallet prosecution
Samourai Wallet was created by Rodriguez and his cofounder, William Longeran Hill in 2015. The software enabled Bitcoin users to manage their own funds, while using privacy features to reduce public tracking.
Whirlpool was one of these features. It allowed users to mix their coins between addresses that they already controlled without sending money to a central operator.
Plea Deal Gamble
Both developers were arrested by federal prosecutors in April of last year. The Department of Justice accused them of operating an illegal money-transfer service and facilitating criminal activities.
Authorities claimed that the software processed more then $2 billion in Bitcoin transactions including funds linked to dark-web markets.
If the case went to trial, both developers could have faced sentences of up to 25 years. They accepted plea deals during the summer instead. Rodriguez received the maximum sentence of five years for the charge while Hill received four years.
Dispute over Money Transmission Laws
Samourai Wallet has attracted attention for not taking custody of the user funds. Since 2013, the US Financial Crimes Enforcement Network (FCEN) has stated that money transmitters control customer funds.
This guidance was repeated for 2019 with a specific reference to noncustodial software.
Records show that before filing charges, prosecutors contacted FinCEN and were informed that Samourai didn’t clearly fit the definition as a money transmitter.
The government still pursued the case based on conspiracy laws. Prosecutors claimed that privacy tools can still be considered illegal transmitters, if they are used to move criminal funds.
Rodriguez did not agree with this interpretation, but accepted the plea agreement to avoid a more lengthy prison term. His sentence includes three years of supervised released and a fine amounting to $250,000.
Developers and privacy activists claim that the case has discouraged development of privacy tools for public Blockchains. They claim that private digital transactions was a core concept behind Bitcoin, and that legal pressures on software creators is threatening that principle.
Rodriguez compared Roman Storm’s conviction, a cofounder of Tornado Cash, an Ethereum-based privacy software. Storm was convicted of similar charges in August.
Related: DOJ Rejects Roman Storm’s Plea and Tornado Cash Verdict will Stand
It is interesting to note that after President Trump’s return to office, the Justice Department dismissed several criminal cases which began during the Biden Administration. The prosecution of Rodriguez, Hill and others remained active.
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