A comprehensive policy brief analyzing the Department of Justice's classification of self-custody purveyors as money transmitters and its implications for the founders of Samourai Wallet.
On April 26th, 2024, the United States Department of Justice (DOJ) took a major step towards restricting self-custody tools by indicting the two co-founders of Samourai Wallet. Charged with conspiracy to commit money laundering and operating an unlicensed money transmission business, the DOJ targeted Keonne Rodriguez and William Hill under a new and controversial legal theory, which deviates from prior jurisprudence and Treasury guidance.
The DOJ’s indictment seeks to broaden the definition of "money transmitters" under the Bank Secrecy Act (BSA) to include non-custodial wallet providers like Samourai Wallet. Historically, Financial Crimes Enforcement Network (FinCEN) guidance and enforcement actions have focused on centralized services, such as exchanges and custodial wallets. Before this indictment—and the prior case against the Tornado Cash developers—self-custodial tools like Samourai Wallet had been generally understood to fall outside the BSA's provisions, as they do not hold users’ private keys and merely facilitate peer-to-peer transactions.
The DOJ’s legal theory poses a direct threat to non-custodial wallet tools, suggesting that merely facilitating peer-to-peer transactions can trigger money transmitter regulations. This interpretation, if upheld, risks redefining self-custody tools as “money transmitters” and could impose severe compliance burdens on developers and users alike.
The full brief is available for download here.
