The samurai did nothing wrong. His self-care tool is not a money transfer device.

Today, the Department of Justice announced that Keonne Rodriguez and William Hill have been arrested and charged with operating Samourai Wallet, an “unlicensed money transfer enterprise” that conducted “illegal transactions.”

Fuck the Department of Justice, get over it. Samourai did not in any way store or control User funds and in particular did not execute any transactions on User’s behalf. It is a fully self-managed wallet in every way. They have made absolutely no compromises on any of the features they have implemented from the beginning till now.

They are facing up to 20 years in prison for conspiracy to commit money laundering and up to 5 years in prison for conspiracy to operate an unlicensed money transfer business.

This is literally crazy.

Let’s look at some of the language used in the press release about the arrest.

“Samourai illegally combined several unique features to execute anonymous financial transactions worth more than $2 billion for its customers.”

What on earth does that mean? “Illegal combination of multiple unique features” ? They wrote source code that mixed 1s and 0s and combined them into specific arrays? They wrote a computer program that generates a piece of data about the user’s own device, their own property, signs it with an encryption key, and then sends it out to the Internet for other people’s computers to voluntarily download and view? Maybe we could pass the 1s and 0s to someone else’s computer?

It is a protected First Amendment right. full stop. Writing and publishing source code is a freedom of expression. The absurd claim that “unique features were combined illegally” essentially boils down to “words were wrong.” That’s not legal. They are literally implicitly stating that certain types of speech or combinations of speech are illegal. That’s crazy.

“These private keys are not shared with Samourai employees, but Samourai operates centralized servers that, among other things, supervise and facilitate transactions between Samourai users and generate new BTC addresses used during transactions.”

Samourai does not generate addresses for you, but through its own wallet. full stop. Samourai’s servers play no role in generating your address. This is actually a false statement. Additionally, the framing of “overseeing and facilitating” transactions is a very intentional framing. They ultimately have no control over the transaction composition process other than being passive message bearers. At no stage of this process do they gain control over the transaction you construct, and the final destination of the transaction (which is yours) is entirely up to you. Transaction authorization is solely by the user himself.

At no stage of the process when you structure a transaction does Samourai gain any control over your funds, influence over where those funds are spent, or the ability to prevent your funds from being used whenever and wherever you wish.

The press release went on to specifically single out Whirlpool and Richochet as the two features in question. First of all, it’s crazy that Ricochet is classified or implied to be some kind of money laundering or some kind of illicit trading structure. Richochet is literally a series of transactions in a chain that sends money to yourself over and over again.

It is as follows:

Literally every single wallet that exists in Bitcoin can create its own spending chain like this. Every single one of them. All you have to do is keep sending your Bitcoin to a new address in your wallet. Is this money laundering? Is this illegal? Is it illegal to spend money on myself, not do business with outside entities, or interact with other people? Fuck you. That’s completely crazy. So are all wallet providers facilitating money laundering? Is that the crazy way they’re going to set a precedent in this case?

This is Whirlpool, now CoinJoin Coordinator. Samourai’s servers claim to coordinate “batch cryptocurrency exchanges” between groups of users. That’s not correct. It’s a period. Within Whirlpool CoinJoin, no one sends money to anyone else. All users involved give your money back to yourself. No transfer of funds occurs from one user to another. full stop. Trying to portray this as facilitating users transferring funds to one another is technically incorrect and false. All CoinJoin is about is users sending their money back to themselves, i.e. spending it themselves.

It’s funny that you didn’t mention STONEWALL or STONEWALL2x, which are pure peer-to-peer CoinJoin that actually facilitate payments between users. I’m pretty sure the samurai had literally nothing to do with the deal. at all It is coordinated between users without any intervention on Samourai servers. The attempt to distort Whirlpool CoinJoin and frame it as a real money transfer is probably just a coincidence and not a significant distortion of technical reality, given the fact that STONEWALL exists. They are just confused.

In the actual indictment, they claim that “Samurai” “automatically mixes output” without distinguishing between user wallets, which Samurai itself does not participate in, and the backend servers they operate. no. User wallets require users to manually connect to the backend coordinator, After the user initiates and approves the remixThe user software independently participates in the transaction proposal process and approves the signature of the resulting transaction if it meets the conditions approved by the user.

They also claimed in the indictment that Samourai had a duty to enforce KYC and AML regulations on its users “as a money transfer business.” They are not in the business of transferring money. full stop. They cannot manage, control or unilaterally trade user funds under any circumstances. To claim that they are a money transfer provider and have an obligation to collect and enforce KYC and AML regulations for their users is to claim that all self-managed wallets and services in this entire ecosystem are under the auspices of money transfer regulations. .

This is beyond crazy and completely contradicts all of FinCEN’s past explanations on the matter.

Samurai is not in the money transfer business. full stop. All of the services they provide are listed in the indictment. “Delivery, communications or network access services used by money transfer companies to support money transfer services;.” In 2019, FinCEN made it clear in specific and completely unambiguous language that the types of services Samourai provides are not money transfer services.

All aspects of this case frame their services and products as money transfers, acting as money transfers on behalf of others, is completely inconsistent and inconsistent with the reality of how this technology works. This is a cunning and manipulative attempt to use this as an example to push the precedent that purely non-custodial tools and services fall under money transfer services. If the regulatory body with the authority to process these definitions and related regulations explicitly states that they do not fall within them..

This whole incident is completely absurd and needs to be pointed out loud and consistently. The precedent this could set going forward for any self-managed tool is completely ridiculous and not something that can happen. Twitter shenanigans and old drama don’t matter right now. The reality of the U.S. government’s insane and excessive influence is significant.

If you haven’t grown yet, now might be a good time to do so. Serious issues like these that we’ll be dealing with as we move forward in this cycle are far more important than silly Twitter drama.