With less than three weeks remaining, a recent filing suggests that New York prosecutors are contemplating dropping charges against the co-founders of Samourai Wallet in light of the Department of Justice's (DOJ) updated stance on crypto-related enforcement. The co-founders are currently confronted with the possibility of spending up to 25 years behind bars for alleged offenses including money laundering and unlicensed money transmission.

Following a memo issued by U.S. Deputy Attorney General Todd Blanche, which outlined revised enforcement priorities within the DOJ relating to cryptocurrency, both prosecution and defense teams jointly penned a letter to District Judge Richard Berman requesting a 16-day extension to allow prosecutors time to reassess their position regarding the case.

The memo from Blanche directed ongoing investigations that do not align with the new policy to be terminated and mandated a review of existing cases in accordance with these updated guidelines. Subsequently, lawyers representing the accused individuals urged SDNY prosecutors for dismissal under the purview of the Blanche Memo, leading to discussions between all parties involved.

The initial charges against Rodriguez and Hill, which were brought last April and encompassed accusations of money laundering conspiracy and operating an unlicensed money transmission business, could result in sentences of up to 20 years and five years respectively. Allegations suggested that Samourai Wallet had facilitated illicit transactions totaling around $2 billion over nearly a decade, generating approximately $4.5 million in fees for the defendants during this period.

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Samourai Wallet Prosecutors Are Considering Dropping Charges Under New DOJ Crypto Enforcement Priorities: Filing

The co-founders are each facing up to 25 years in prison for alleged money laundering and unlicensed money transmitting.

• New York prosecutors are considering dropping charges against Samourai Wallet co-founders following a recent DOJ memo, informing staff that the agency would be narrowing its crypto-related enforcement priorities.
• Both parties submitted a joint letter to the court asking for a 16-day extension in case deadlines while prosecutors weigh their options.

In a joint letter to District Judge Richard Berman of the Southern District of New York (SDNY), both prosecutors and lawyers for Rodriguez and Hill requested that the case be granted a 16-day continuance, or extension, “while the Government determines its position” in response to the defense’s request that the case be dismissed under the auspices of U.S. Deputy Attorney General Todd Blanche’s recent memo to the Department of Justice’s (DOJ) staff.

Blanche ordered any ongoing investigations inconsistent with this new policy to be closed, and said that his office would work with the DOJ’s criminal division to “review ongoing cases for consistency with this policy.”

Three days after Blanche’s memo, lawyers for Hill and Rodriguez sent a letter to SDNY prosecutors “requesting the dismissal of the superseding indictment under the Blanche Memo," according to Monday's filing On April 24, the parties met to discuss the request.

Last April, Rodriguez and Hill were charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. The charges carry a maximum sentence of 20 years and five years, respectively. Prosecutors said Samourai Wallet had facilitated around $2 billion in “unlawful transactions” between 2015 and 2024, with the pair collecting a combined $4.5 million in fees.