Samourai developers appear together in court for the first time at the status conference

Today, Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill appeared together in court in the Southern District of New York for a status conference.

This was the first time the two have made a public appearance together since the US Department of Justice (DoJ) charged the two developers with conspiracy to launder money and conspiracy to operate an unlicensed money transmission business in April 2024. It was also the first time either of them had appeared in court since Hill appeared before bail in July and Rodriguez attended a court hearing for the first time in May.

The prosecution first addressed the court, saying it had produced “voluminous batches of discovery.”

The first batch made available to the defense in mid-June 2024. This batch contained, among other data, business records, emails and social media account information.

The second batch, which he made available to the defense in mid-August 2024, included data extracts from devices the DoJ seized from the two developers. The DoJ extracted information from 15 of the 44 devices seized from Rodriguez and 25 of the 27 devices seized from Hill.

The prosecution also said it would produce a third batch of discovery containing a “relatively modest” amount of data and was prepared to proceed with the trial.

No evidence of money transmission

Rodriguez’s attorney argued that it was premature to set a trial date because the defense had not yet reviewed all of the discovery made available in mid-August 2024. The defense also said it had yet to find any evidence that Rodriguez or Hill operated an unlicensed money transmission business.

Hill’s attorney said they received 8 terabytes worth of discovery. To put this amount of data into context, he explained that this is the equivalent of 75% of the amount of information in the Library of Congress, and that if this information were printed, the paper it was printed on could be stacked “to the moon and back 22 times”, showing that it would be difficult to solve and revise.

Hill’s attorney also referenced the letter from Sens. Cynthia Lummis (R) and Ron Wyden (D) in which the lawmakers stated that the DoJ’s unprecedented interpretation of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) statute in USA regarding operating a money transmitter without a license. the business contradicts the intent of the rule. For this reason, he proposed a motion to dismiss the charge.

The judge denied that request and scheduled a further hearing for December 17, 2024 at 10 AM ET.

Rodriguez’s Request for Bail Modifications

During the second part of the conference, Rodriguez’s attorney requested two changes to Rodriguez’s bail conditions. He asked the court to remove Rodriguez’s house arrest warrant and for the court to modify restrictions on Rodriguez’s ability to trade cryptocurrencies, some of which were earnings from Samourai. (Zack Shapiro, legal fellow at the Bitcoin Policy Institute (BPI) later explained to me that the second amendment was requested in part so that Rodriguez could use Samourai’s bitcoin proceeds to pay legal fees.)

Rodriguez’s attorney argued that home detention was “unreasonably restrictive” and “unnecessary” and that Rodriguez is not a flight risk. The defense also cited two instances where Rodriguez had an opportunity to flee but did not in its efforts to argue that Rodriguez no longer needed to wear a location-monitoring device.

The prosecution objected, arguing that Rodriguez’s home detention was necessary to ensure that Rodriguez would continue to appear at trial. It also stated that the charges against Rodriguez for running a “cryptocurrency money laundering business” were severe and that Rodriguez faces a potential sentence of up to 25 years.

The prosecution went on to cite evidence from handwritten pages it obtained from Rodriguez’s home that detailed how he would flee the country to a jurisdiction from which it would be difficult to extradite him. This information included a list that included various passports, as well as $10,000 in cash, a burning phone, an unused SIM card, and various mnemonic phrases for crypto assets, among others.

Rodriguez’s attorney argued that this plan applied to what Rodriguez would do in the event of a more general emergency, while the prosecution argued that this was Rodriguez’s actual escape plan.

The prosecutor’s office said it was “a pretty good plan” and that they don’t think it’s appropriate to stop monitoring Rodriguez at this time. However, the prosecution said it would consider allowing Rodriguez some leeway if requested, without elaborating.

The judge did not allow the bail conditions to be changed and asked both the prosecution and defense to “come to the case”.

Donate to the legal defense fund for Rodriguez and Hill via BPI’s P2P Rights Fund.