DOJ Is Charging Founders of Samourai Wallet for Allegedly Laundering Bitcoin
by Michael Dean Thompson
Two men, Keonne Rodriguez and William Lonergan Hill, have found themselves indicted for Conspiracy to Commit Money Laundering and facing up to a quarter of a century of jail time. It is not apparent that the men themselves conspired to launder any money. Rather, they are being charged because the software they created may have enabled the laundering of Bitcoin by other people.
The open-source software is called Samourai Wallet and works by mixing transactions together, effectively anonymizing them. Rodriguez offered the analogy of smelting gold bars together. He told Reason, “You take your Bitcoin, you add it into [the conjoin protocol] Whirlpool, Whirlpool smelts it into new pieces that are not associated with the original piece.” The new “piece” would be harder to track, but that does not mean it would be used for illegal transactions.
The free speech ramifications are pretty far reaching. Jerry Brito of the cryptocurrency nonprofit Coin Center talked to Reason after the U. S. Treasury similarly went after the makers of another anonymizing software. He said, “So, basically, anybody who is in any way associated with this tool ... a neutral tool that can be used for good or ill, those people are now basically being deplatformed.”
Alex Gladstein, chief strategy officer of the Human Rights Foundation, told Reason, “The ATM model, it gives people the option to have freedom money. Yes, the government will know-all the ins and outs of what flows are coming in and out, but they don’t know what you do with it when you leave. And that allows us to preserve the privacy of cash, which I think is essential for a democratic society.”
The government is currently enjoying the increasing reliance on digital banking. Along the border with Mexico, the state of Arizona and the Department of Homeland Security have collected more than 145 million financial transactions through Western Union and other money transfer systems. They are able to achieve incredible insights into our behaviors by tagging and classifying our myriad transactions. Meanwhile, the ever-diminishing list of items we can purchase privately through cash also shrinks, tolling the death knell of actual ATM usefulness.
Fortunately, the efforts of some in the government to supplant Bitcoin with a Central Bank Digital Currency have not succeeded. If they were to do so, financial privacy and freedom would effectively end, with the government able to far more efficiently and effectively control the flow of money with pinpoint granularity.
As Reason points out, would the maker of the smelting furnace be imprisoned if someone made an illegal transaction using gold that passed through one of their smelters? Unlike an assault rifle, Bitcoin and Samourai Wallet were not designed to harm, that is up to the user. Yet, if the makers of Samourai Wallet can be charged for the intent of its users, can Meta be charged for encrypted messaging or Colt for Uvalde? Is the government responsible for conspiracy to commit money laundering via the cash it prints? There is no doubt some have used it for that.
What this really is about is the surveillance and control of money. A famous quote (and perhaps a dire warning) often attributed to Henry Kissinger declares: “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls the money can control the world.”
Source: Reason.com
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