Rodriguez and Hill contest the evidence of illegal money transmission, while the prosecution rejects Rodriguez’s request to amend the bail conditions.
On September 17, Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill appeared in the Southern District Court of New York for their first public appearance since the U.S. Department of Justice charged them with money laundering conspiracy and operating an unlicensed money transmission business.
Prosecution’s position
The prosecutor informed the court that numerous new documents had been produced and made available to the defense in mid-June. The first batch includes business records, emails, and information on social media accounts. The second batch, made available in mid-August, contains data extracts from devices seized from the two developers. In total, data were extracted from 15 of Rodriguez‘s 44 devices and from 25 of Hill‘s 27 devices. The prosecution also indicated that a third batch, containing a relatively modest amount of data, will be produced shortly, after which the trial will proceed.
Defense’s position
Rodriguez’s lawyer emphasized that setting a trial date is premature as the defense has not yet had the opportunity to review all the documents made available in mid-August. Additionally, the lawyer stated that no evidence had been found indicating that Rodriguez or Hill managed an unauthorized money transmission business.
Hill’s lawyer explained that approximately 8 terabytes of data had been received, asserting that it would be difficult to analyze and review such a large volume of data in a short time. The lawyer also cited a letter from Senators Cynthia Lummis and Ron Wyden, in which the legislators argue that the Department of Justice’s interpretation of operating an unauthorized money transmission business contradicts the intent of the Financial Crimes Enforcement Network (FinCEN) regulations. Therefore, a motion to dismiss the charges was proposed but denied by the judge, who set a new hearing for December 17, 2024.
Rodriguez requests bail review
During the hearing, Rodriguez’s lawyer requested two changes to the bail conditions: the removal of the house arrest mandate and the modification of the restrictions on Rodriguez’s ability to conduct cryptocurrency transactions. The second modification was partly requested to allow Rodriguez to use bitcoin proceeds from Samourai Wallet to cover legal expenses.
Rodriguez’s attorney argued that house arrest is “unduly restrictive” and “unnecessary,” stating that Rodriguez does not intend to leave the country and highlighting two instances where he could have fled but did not. The prosecution countered, arguing that house arrest was necessary to ensure Rodriguez’s appearance for the trial, citing the severity of the charges and the risk of a potential sentence of up to 25 years.
The prosecution also presented evidence obtained from Rodriguez’s home, detailing how to escape the country. The document includes a list of passports, $10,000 in cash, an emergency phone, an unused SIM card, and a series of cryptocurrency wallet mnemonic phrases. The defense claimed these details pertain to a general emergency plan, while the prosecution argued they constitute an active escape plan.
The judge denied the modification of the bail conditions and urged both parties to proceed with the case.
