CryptoQuant CEO Supports Samourai Wallet Founders Amid DOJ Indictment Alleging Crypto Mixing Service Laundering Nearly $100 Million

Amidst the U.S. Department of Justice's indictment of Samourai Wallet founders for allegedly operating a crypto mixing service involved in laundering nearly $100 million, CryptoQuant CEO Ki Young Ju has voiced staunch support for the accused. Ju has defended the role of the crypto mixer in preserving user privacy and has pushed back against the charges brought against the founders.

In an April 25 Twitter thread, Ju asserted, "The US DOJ has arrested pioneers in Bitcoin privacy technology. Privacy stands as a core value of Bitcoin. Mixing itself is not a crime. Even crypto exchanges use mixing to safeguard user privacy."

Furthermore, Ju emphasized that the legality of a feature is contingent upon its usage and intent, drawing a parallel with the usage of a knife, which can be both lawful and illicit. He remarked, "It’s like punishing the inventor of the knife instead of the one who uses it."

The DOJ has accused Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill, of operating a service that allegedly facilitated over $100 million in transactions tied to illicit activities. Since its inception in 2015, the service is alleged to have handled approximately $2 billion in illicit transactions, generating around $4.5 million in fees.

Rodriguez was arrested and is slated for arraignment in Pennsylvania, while Hill was detained in Portugal and awaits extradition to the U.S. The crackdown extended to seizing the Samourai Wallet website hosted in Iceland and issuing a warrant to remove its mobile application from the Google Play Store.

Evidence from tweets and private messages indicates that the founders actively marketed their service to users seeking to launder criminal proceeds. The application, with over 100,000 downloads, reportedly targeted participants in the black and grey markets, particularly during the COVID-19 pandemic.

Edward Snowden, a prominent whistleblower and advocate for digital privacy, criticized the DOJ's actions, asserting, "The Department of ‘Justice’ has once again criminalized the developers of an app that restores financial privacy."

Lyudmyla Kozlovska, a human rights advocate, highlighted U.S. law enforcement's capabilities in detecting financial crimes involving cryptocurrencies. Kozlovska argued against the criminalization of mixing technologies and their developers, emphasizing the need to address privacy concerns in regulatory discussions.

Meanwhile, the FBI cautioned Americans against using unregistered cryptocurrency money-transmitting services in an April 25 public service announcement. The FBI urged adherence to existing Know Your Customer (KYC) and Anti-Money Laundering (AML) laws, warning of potential financial disruptions during law enforcement actions against unlicensed services.