Samourai Wallet Showdown: Co-Founders and Prosecutors Push for Delay Amid Possible Case Dismissal

Hang onto your hats, crypto fans! The legal battle between Samourai Wallet's co-founders and U.S. prosecutors just got a twist. Both sides have asked a federal judge to pump the brakes on court proceedings as they mull over a potential case dismissal. Can you feel the tension?

Extension Request on the Table

In a gripping letter dated April 28, Samourai Wallet's defense attorneys told Judge Richard Berman they've teamed up with the government for a 16-day extension on pretrial motions. The clock is ticking, folks!

If the judge gives the green light, the deadline for motions slides to May 29, with responses due June 26 and replies by July 10. But hold up—the trial date set for early November? That's staying put, no matter what.

Charges and Arrests: A Crypto Drama Unfolds

Here's the backstory: In April 2024, the U.S. Department of Justice threw the book at Samourai Wallet CEO Keonne Rodriguez and CTO William Hill, charging them with running an unlicensed money-transmitting biz and laundering over $100 million through their platform. Rodriguez was cuffed in the U.S., while Hill got nabbed in Portugal and is now chilling in extradition limbo.

But wait, there's more! According to the April 28 letter, the defense attorneys for Rodriguez and Hill had a pow-wow with prosecutors on April 24 to talk about dropping these charges. They argued it'd be a "significant expense" to prep motions while the DOJ is still playing hot potato with their decision on whether to move forward.

And get this—the prosecutors agreed to the delay "without expressing any views on the merits," the letter spilled. It's like watching a high-stakes poker game, and we're all on the edge of our seats!

A Major DOJ Policy Flip-Flop

This joint request for a delay comes hot on the heels of a massive policy U-turn within the Justice Department. In early April, Deputy Attorney General Todd Blanche dropped a bombshell memo, disbanding the DOJ's National Cryptocurrency Enforcement Team. That's right, the task force created under the Biden admin to chase down crypto-related crimes? It's history.

Blanche didn't hold back, slamming the previous administration's "reckless strategy of regulation by prosecution" and making it crystal clear that the DOJ "is not a digital assets regulator." Ouch!

The memo told prosecutors to keep their enforcement efforts focused on cases with direct criminal harm, like fraud against investors or using digital assets to pull off serious crimes. It's a whole new ballgame, folks!

Samourai's lawyers wasted no time, firing off a letter to Acting Manhattan U.S. Attorney Jay Clayton on April 10—just days after the DOJ memo—begging for the case to be tossed out in light of the department's fresh crypto enforcement stance.

See, the DOJ used to see platforms like Samourai as enablers of shady business, but the new guidance says to narrow the scope and not go after developers just for building privacy tools. It's a game-changer!

And guess what? This policy shift is already making waves in other cases. On April 9, SafeMoon CEO Braden Karony waved Blanche's memo in front of a New York judge, asking to drop his fraud and securities charges, claiming they don't jive with the DOJ's updated stance anymore.

Buckle up, crypto world—this legal rollercoaster is just getting started!