SDNY vs. DOJ: Samourai Wallet Caught In Crosshairs

Earlier this month, Deputy Attorney General Todd Blanche asked the Department of Justice to reconsider criminal cases brought against cryptocurrency mixers, in a memo outlining priorities for the agency.

On Monday, the parties in the criminal prosecution of Samourai Wallet developers Keonne Rodriguez and William Longergan Hill filed a joint motion asking the court to exclude the time the DOJ is taking to reconsider the Samourai Wallet case from the pre-trial timeline, revealing that the defense had asked the prosecution to drop the charges based on the Blanche memo.

In response to the filing, media outlets were quick to title that the DOJ is considering to drop the charges against the developers. While it is good news that the prosecution agreed to the exclusion of time, nothing in the filing suggests that prosecutors are, in fact, considering to drop the case.

The Sovereign District of New York

The Southern District of New York (SDNY) and DOJ leadership have a complicated relationship. Known as the DOJ's most prestigious attorney's office, featuring elite legal talent overseeing the US' most high-class criminal cases, SDNY has established a culture in which it has largely acted independent of headquarter's oversight.

Earning itself the title "Sovereign District of New York", SDNY does not tend to care what DOJ leadership thinks of its prosecutions, creating a relationship that has not been without controversy.

When Attorney General Pam Bondi authorized the dismissal of corruption charges against New York City Mayor Eric Adams in the beginning of the year, and SDNY refused to act on DOJ's orders, the office saw a swath of suspensions followed by resignations, with prosecutors publicly arguing against the Attorney General's decision – a landmark moment, as SDNY is meant to fall in line with policy established by the DOJ.

The fact that the charges against both Samourai Wallet and Tornado Cash developers have not been dropped three weeks after the memo, which many argue to have clearly established the framework to let the developers go, may rather be read as a sign that the office is attempting to strategize how to keep the cases alive, for which the memo may offer legal loopholes.

SDNY must review the case according to the Blanche memo – Asking for more time to consider dropping the charges is rather an implication of the fact that SDNY has not yet made up its mind. Clickbait headlines, such as those published by CoinDesk, lull the public into a false sense of security that may hurt the developer's fundraising campaign.

Given the drastic implications of the developer's conviction not just for Bitcoin development but for software development overall, dropping the charges are the news we have all been waiting for – but we shouldn't assume that an attorney's office known for defying DOJ orders will do us any favors.

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