This morning, a letter filed by the Defense of Samorai -Tevebogs developers Keonne Rodriguez and William Lonergan Hill revealed that the southern district of New York (SDNY) had suppressed Exculpatory in the criminal case.
Under the filing, the prosecution had consulted the fincen before the indictment of the developers of the viability of placing unicited money transfer fees against a non-parenting authority.
“A mixer like Samorai, who does not take custody of cryptocurrency by possessing the private keys, will strongly suggest that Samorai is not acting as an MSB,” the fincal told the charges, according to the archiving.
In internal communication, prosecutors stated that they can set fees based on the “functional control” of the code, which probably refers to Samorai’s control over the user interface and Samorai Wallet’s CoinjoinOin server. The prosecution stated that such an argument “has never been dealt with in the guidance”, recognizing that “it could be a difficult argument to do.”
Communication between Fincene and SDNY was revealed after a so-called Brady request that ordered the government to provide any evidence that can free the developers of the charges.
The government is obliged to hand over Exculpatory evidence to the defense two weeks after submitting its indictment most recently. The late disclosure of so much relevant materials may now have misled the court, claims the letter affecting both the guarantee requirements set on the developers as well as the judge’s propensity to refuse the submission of a proposal for rejection.
The defense is now seeking a consultation to determine potential remedies for SDNY’s behavior, including dismissal of charges.
“It’s hard to imagine a clearer example of” regulation by prosecution “than what we have here,” says the defense, referring to the recent blache memo. “The relevant regulator who tells the prosecutors that Samorai Wallet was not a money submitter – under the same public guidance that Mr. Rodriguez and Mr. Hill depended on to guide their behavior – and the charges who went ahead and accuse them of running an unlicensed money services.”
Fincens’ attitude towards non-parenting authorities shared with SDNY repeating his guidance in 2019, which stated that “a cryptocurrency-tevebook provider must be classified as a money overlay if” the host has totally independent control over the value (although contractually obliged to access the value only on the owner). “
Both advocates and legal scholars have long claimed that the prosecution of the Samorai -Tevebog developers as well as the prosecution of Tornado Cash developers Roman Storm and Roman Semenov constitute a clear violation of the fincen guidance.
While Samorai’s Brady request was successful, a similar request from Tornado Cash Developer Roman Storm, who tried to force the government to reveal “Any material received from OFAC and the fincene that has not already been produced, including any material communication with these agencies”, as the government argued that the Finc is not part of the court team.
As a storm pointing out to X, he was arrested the same day as Samorai -explorers consulted the Finc on the viability of unlicensed money transfer fees, which made it look as if SDNY has also been aware of the stretch of his charges throughout Storm’s prosecution.
“The Finc was explicitly informing SDNY-Proseclators that Samorai Wallet’s non-parenting authority did not require a license for money, but still accused DOJ developers regardless,” Bitcoin Policy Institute’s leader of the Zack Shapiro policy told Bitcoin Magazine. “This prosecution exemplifies regulation of criminal charges that directly defy Vice President AG Blanche’s Directive and undermines Trump administration’s cryptopolitics.”
“Brady overgrowth,” writes expert on laundering money laundering money on X. “The case must be thrown on it alone, far less the new DOJ-Memo, which effectively orders SDNY to drop the case.”
“The fact that prosecutors were trying to withhold this information from the defense is a serious ethical violation and could end up having the case thrown,” Verret tells Bitcoin Magazine. “That’s if DOJ doesn’t let it all together, as the main course has effectively ordered the cases like this.”
“As we have said,” writes Peter Van Valkenburgh at X, “DOJ’s illegal money transfer persecution is right up to counteract the rule of law. Today we got further confirmation that the prosecution understood that it was contradictory long -term regulatory guides, but nevertheless brought accusations.”
“It follows that if they were not money transfers under the guidance of the Finc,” the defense said in their letter, “then they could not be prosecuted for not having a license and not implementing control of money laundering,” points out that the case against Samorai Wallet developers should be completely thrown out.
This is a guest post of L0LA L33TZ. Opinions that are expressed are entirely their own and do not necessarily reflect those from BTC Inc or Bitcoin magazine.