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TFTC - The Regulator Said It Was Legal. I'm Going To Prison Anyway. | Keonne Rodriguez

Dec 9, 2025
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TFTC - The Regulator Said It Was Legal. I'm Going To Prison Anyway. | Keonne Rodriguez

TFTC - The Regulator Said It Was Legal. I'm Going To Prison Anyway. | Keonne Rodriguez

Key Takeaways

This episode follows Samourai Wallet co-founder Keonne Rodriguez as he explains how building non-custodial Bitcoin privacy software led to federal prosecution, despite FinCEN, the relevant regulator, explicitly stating that Samourai was not a money transmitter. He describes getting into Bitcoin for censorship-resistant digital cash, not speculation, and how Samourai was designed to give users basic financial privacy comparable to traditional payment networks, where merchants cannot see your full financial history. Over time, however, the U.S. government hardened its stance that there is no legitimate reason for financial privacy, treating privacy tools as inherently criminal and arguing that simply knowing bad actors could use Samourai made its creators co-conspirators. The DOJ withheld exculpatory FinCEN communications for a year, a new judge known for harsh sentencing denied all defense motions without argument, and Rodriguez ultimately accepted a plea to avoid a near-certain 25-year sentence under a biased process where truth, precedent, and even constitutional protections like the Fourth Amendment seemed irrelevant. Beyond his personal case, Rodriguez warns that this approach threatens all non-custodial builders, miners, and educators, and that if we allow privacy to be stamped out now, Bitcoin will drift toward becoming a surveillance tool rather than the emancipatory technology it was meant to be.

Best Quotes

“The government doesn’t care about precedent. If they want to go after you, they will go after you.”

“In order for the human condition to flourish, privacy has to be part of that.”

“You can’t be a money launderer if you never had the money.”

“FinCEN said we weren’t a money transmitter because we never took custody, and the DOJ indicted us anyway.”

“The truth does not matter in a federal criminal trial.”

“Bad actors will always use technology, VPNs, Tor, Signal. That doesn’t make the technology criminal.”

“If we stomp out privacy now, Bitcoin becomes a surveillance panopticon instead of a tool for freedom.”

“You can’t become the crypto capital of the world while throwing your builders in cages.”

“No victims. No criminals. Just software developers being punished for writing code.”

“The Southern District of New York ignored their own regulators and even ignored executive orders, they do whatever they want.”

Conclusion

The conversation with Keonne Rodriguez is both a personal story of injustice and a warning about the future of digital money and civil liberties. His prosecution shows how far U.S. authorities are willing to stretch legal theories, bury exculpatory evidence, and disregard the technical realities of non-custodial software to maintain control over financial flows and suppress privacy. If builders can be caged for writing open-source tools that never hold customer funds, the chilling effect reaches far beyond Bitcoin to the foundations of free software and permissionless innovation. Rodriguez’s call for awareness and a presidential pardon is ultimately a call to decide what kind of future we want: one where Bitcoin and similar technologies expand human freedom, or one where they are captured and weaponized as part of an all-seeing surveillance state.

Timestamps

0:00 - Intro
0:31 - Why Samourai
6:31 - Why privacy
12:00 - Government hates privacy, miners are next
17:47 - Bitkey & SLNT
19:36 - Story of the trial
33:29 - Unchained & CrowdHealth
34:45 - Do we live in a free country?
40:55 - What needs to happen?
47:07 - Chain surveillance
50:00 - Endangering innocent users
54:02 - The case for a pardon
57:00 - Does the plea set a precedent?
59:32 - How is Keonne?

Transcript

(00:00) a government that wants to not destroy Bitcoin because that would be counter to their desires, right? They want to control Bitcoin. In order for the human condition to flourish, privacy has to be part of that. The government doesn't care about president. If they want to go after you, they will go after you. The truth does not matter.
(00:16) Fast forwarding now to April 24th, 2024, when the FBI conducts a pre-dawn raid on my house, I come to find out I'm charged with uh two crimes. Keon, this is uh this is crazy. This is the first time that you've been on this show and it's for uh it's for a very I don't want to say somber, but we're going to record to make the case for yourself and Bill to stay out of prison.
(00:53) Um guess that's a morbid way to start off the podcast. How are you one? Yeah, I'm doing good. Thank you for having me on here, Marty. Um, I was trying to remember if I had done this podcast or not as Samurai cuz I know we've done some things together. Um, but I don't think it was uh this podcast. Yeah, I think we've done Rabbit Hole Recap and Right. other things together.
(01:17) The uh I don't know. I've been thinking a lot over the last few days of uh how to start this this episode. I've been watching a lot of the appearances you've done on Pod 256. um the show with Kevin Kelly and um uh Tableau last week and I think jumping off obviously you were the co-founder of Samurai Wallet yourself and Bill um were subject of prosecution from the Department of Justice uh you guys pled pled uh pled out uh to take on a lesser sentence and I think we'll get into the sort of details of the trial and how um how that went. But before the what, I
(01:59) think it's important really cuz I've known you in the space for quite a while. Okay. Going all the way back to your blockchain.info days. I I think uh it's important for the audience to really understand why you decided to found Samurai Wallet and why you dedicated your life to privacy um for people using Bitcoin.
(02:23) Why did you get into this in the first place? Yeah, sure. Uh so you as you mentioned I started my career in Bitcoin at blockchain.info now known as blockchain.com uh in 2012 and that's actually where I met uh Bill who would co-ound Samurai Wallet with me later on. And um to really understand why I co-ounded Samurai Wallet I think you have to kind of understand why I got into Bitcoin at all.
(02:49) And um you know when I got into Bitcoin 2012, it really wasn't about making money or or number go up or you know um an investment. It was a real practical purpose. And I saw Bitcoin as a truly uh censorship resistant uh version of digital cash. And uh that's what brought me to Bitcoin. That's what I um had I had been passionate about even prior to Bitcoin, right? So, I spent a lot of time dealing with gold and silver because it was a bearer asset that uh couldn't be confiscated and you know uh no one could tell me what I could spend that gold and silver on. Um so when I discovered Bitcoin I was like oh this is a better version of gold or
(03:33) silver. This is an electronic version of that. And um I knew right when I discovered it this is what I wanted to work on. And uh privacy uh to me wasn't like the thing I needed to work on because at that time to me privacy was obvious. If you have a censorship resistant form of digital cash, it needs to be private or it won't be censorship resistant. It would seem like a pretty basic thing.
(04:03) Um, so really what I focused on at the at that time in 2012 was making sure um any of the stuff we built was non-custodial or self-custodial or I guess the parliament of the day is self-hosted, right? Um, and and really focusing in on that aspect of things, right? Because the whole point was to um get rid of intermediaries and third parties.
(04:31) So I wanted to make software that really put the the end user in total and absolute control. Uh and I thought at that time that privacy was just going to come naturally as part of the progression of the protocol. Uh so all that being said by 2015 I think I started to get a little jaded with the Bitcoin space in general and I think Bill was kind of right there with me in feeling that way.
(04:58) We felt like because of the run up in price and because of all the new entrance in the space, a lot of VC, a lot of um traditional finance types, privacy was being pushed to the bottom of the priority list, right? It was more about scaling at that point and less about privacy. And we saw that as a problem, right? Because if we didn't get take care of privacy on uh at this point when there's not a huge amount of users, it's going to be very difficult to do it when there's billions of users and it's going to be very difficult to start changing the protocol. Uh so we realized then that protocol is not going to change. They're not going to implement
(05:32) confidential transactions. They're not going to implement things of that nature. uh which I don't necessarily think is wrong, but it was something that we recognized and instead of crying about it or making a fork of Bitcoin or moving to an altcoin like Monero or something else, we said, "Well, we're into Bitcoin and the majority of people are into Bitcoin.
(05:55) They should have a private experience and they should be able to use Bitcoin in the way that we foresaw it uh as a as a peer-to-peer cash. And if it's not going to happen on the protocol, then it needs to happen on the application layer.
(06:13) And the the primary gateway for users to interact with the network is through a wallet. So let's create a non-custodial Bitcoin wallet that is solely focused on the uh transactional privacy aspect of Bitcoin. And that's what we did with Samurai Wallet. That was the whole starting off point. And diving deeper to the philosophical side of this, I mean, we live in a day and age where many assume that privacy is a bad thing.
(06:46) Why why is that not the case? Like why do individuals need privacy in their financial dealings? Yeah. I mean, people need privacy in every aspect of their life and people enjoy privacy in every aspect of their life. Even the people who say, "Oh, only criminals need privacy." Right? those same people put their letters in envelopes and they put um blinds or curtains on their windows.
(07:06) These are privacy technologies, right? Uh so I think in order for the human condition to flourish, privacy has to be part of that, right? Because you have to be able to um to uh speaking specifically about transactional privacy or financial privacy. If like me, you believe that uh being able to transact is a form of speech, right? So, you for example are supporting a a political candidate or you're supporting uh financially or you're supporting a uh charitable organization financially, that's a form of speech. And if it becomes dangerous for you, like if
(07:47) you're not in the United States, you're in some authoritarian country, it's dangerous. It's dangerous to support a political opponent or it's dangerous to support a a um charitable cause that's that runs, you know, contrary to what powerful people want, right? Uh so being able to do that in a way that's not going to get you imprisoned or killed or something else is essential.
(08:13) But even more practical than that, especially on Bitcoin, there's a safety issue. If anyone can look at the blockchain and see, you know, essentially your net worth in Bitcoin, you're putting a giant target on your back and saying, "Hey, I have X amount of money. Rob me or or kidnap me or or torture me." And we've seen this happen countless times and it's only ramping up, you know.
(08:37) So, there's practical, you know, concerns with financial privacy. There's philosophical concerns with financial privacy, being able to support the causes you want to support. Uh but ultimately all we really wanted to do with Samurai Wallet and Bitcoin more broadly is just replicate the existing financial privacy that you get in the existing traditional finance world.
(09:04) Right? When you go and use Visa at Starbucks, your your Visa card, the the barista or the cashier doesn't get to see what you've spent your money on in the past, doesn't get to see what you're spending it on in the future. They don't know your bank balance. That's a private transaction. And that's what we wanted to replicate with um with Bitcoin. Yeah.
(09:24) And I think the aspect of Bitcoin that makes us particularly unique is the fact that it's a bearer instrument, right? Like many people say, "Oh, you can go look at the Forbes rich list. You can see all these extremely wealthy people and they're not subjected to this.
(09:42) " But I think the fact that Bitcoin is a bare instrument really increases the sort of security uh security risk that exists for for individual Bitcoiners. And like you said, the $5 wrench attacks are only accelerating as more and more nefarious individuals begin to hone in on this key aspect of Bitcoin. Yeah, absolutely. And and to the the Forbes rich list, like two points there, right? like you don't really know what other wealth those people have.
(10:08) You just know the public available information that Forbes prints. But I'm pretty certain a lot of those uh people on that list have more than just what's on that list, right? That list is uh and they're they're not quite liquid.
(10:27) Like to your point about a bare instrument, right? their bank balance might be something, but that's all tied into securities and and you know, other investments and property, this and that. Uh it would be like them having that that Forbes rich list walking around down the streets of Manhattan just pockets filled with gold coins, right? And you could see the outline of the gold coins in their pockets and you could hear the the you know the metal clanging together. That's a invitation to say, "Hey, rob me.
(10:53) I I'm walking around with gold coins in my pocket. And that's essentially what you're doing when you transact on Bitcoin without any kind of privacy um uh knowledge or or or or a strategy, right? A lot of people just don't know the way the blockchain works, especially as Bitcoin's adoption has accelerated uh so rapidly.
(11:16) You have people who really don't understand what they're doing when they are, you know, sending to their self-custodial wallet and they're not taking into account that everyone can see, anyone who's looking can see everything and unless you're doing something specifically to to combat that and that's what the tools of Samurai wallet were designed for, it it's pretty difficult to maintain a basic financial privacy. It takes quite a bit of work.
(11:43) Uh so again that why that's why we created Samurai wallet and tried to make it as user friendly as possible so that the majority of people who don't who aren't so technically minded and don't know the specifics of how to read a blockchain could could benefit from the basic privacy that they deserve and they probably thought they were getting quite frankly and I mean it's obviously abundantly clear that the government does not like what you and Bill built with Samurai wallet and what others uh outside of Bitcoin tornado cash um Bitcoin fog that was in uh that was Bitcoin related but um you have Roman
(12:19) going through some troubles there as well. I do not like individuals using Bitcoin trying to do it privately and yeah obviously you are intimately aware with the perspective of the government after the last few years and I think it's important for people to be aware of how their government views them uh through the lens of of transacting privately. They do not like it and you've experienced this uphand and personal up close and personal.
(12:50) Yeah, it's actually still surprising to me um because it became abundantly clear throughout this, you know, the last almost two years that um the government doesn't see any legitimate reason for financial privacy in general, not just on Bitcoin in general. And they have a open hostility to any kind of privacy.
(13:19) They feel the fourth amendment that protects you from certain seizure is a detriment to their cause of pursuing justice and pursuing you know order. uh which is just such a shocking sh it's it's so contrary to my worldview and I think a lot of Americans worldview that it's it's shocking to hear these people who are supposed to be these paragonss of of law and order and justice have such disregard for basic privacy of the citizenry.
(13:51) Uh so yeah, it became abundantly clear that the government doesn't see any legitimate use for financial privacy on Bitcoin uh at all. and their whole um case revolved around the uh idea that the only reason we created Samurai Wallet was to facilitate crime, not to do anything regarding uh you know privacy or protecting people's rights or giving people uh the the the basic uh privacy rights that they allegedly have. It was solely to facilitate crime.
(14:25) Uh, which is, you know, laughable because that's not why we got into this um at all. It's not only laughable, it's scary. I mean, obviously very scary for you. You're going through, you've been sort of thrown through the ringer of the the court system here in the United States. But like Matt and I, we've been literally up until the DOJ and the FBI sort of raided your house and took it to a cage.
(14:58) We would talk weekly about the software updates that you guys were were incorporating into Samurai Wallet and literally teaching people listening to our podcast how to leverage tools like Samurai to achieve financial privacy um when using Bitcoin. And if you extend what what's happening to you and Bill into the future and this precedent is set, like what's to stop them from coming after individuals like Matt and I, Econo, Alchemist, others who care deeply about this and are trying to educate other individuals about how to use Bitcoin privately that that they're
(15:35) not going to be subject to some sort of um blowback from the government because they're educating people about how to do this. Uh, do they think we're educating criminals how to how to evade um the government? Yeah. Yeah. It's a absolutely legitimate and valid concern. I think I think more builders within the space should be looking at what the government has done here and really um shoring up their defenses um both you know legally um to to at some point expect the government will come knocking and they don't just knock peacefully you know
(16:15) they come in heavy-handed I think miners in particular um are going to be squeezed next right because if we're if we're going by the government's theory that um and and this is their theory with Samurai um that you don't that custody and control makes no difference um to money transmission.
(16:36) If that's their and and that's their theory of Samurai, that's their theory in tornado cash. Custody and control makes no difference. Well, if you really want to put it through that lens, then the only people who are actually performing money transmission on Bitcoin network are the miners because they're the ones that are selecting which transactions go into a block.
(16:54) All of the transactions that Samurai wallet created, while unconfirmed, there was no transmission. Nothing moved. It wasn't until the miner included in the block that it became a transaction for real. Uh so I think miners are going to be the next ones that are squeezed. And I think they'll do it, you know, in such a way to say, look, you need to only accept transactions from, you know, um, certain counterparties like Coinbase and regulated exchanges. You can't accept self-hosted transactions.
(17:24) Uh, and if you and you need to do OFAC screening and you need to do KYC, AML or your counterparty does. Um, you know, I don't know when that's going to come, but that's to me it seems like a pretty obvious next step uh for a a a government that wants to uh not destroy Bitcoin because that would be counter to their desires, right? They want to control Bitcoin and that's a great way to do it.
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(19:36) Let's dive into this key aspect here which is the non-custodial nature of Samurai and what the government claim that you're doing. Again, throwing this sort of technical detail to the wind for money transmission laws. Uh, and I guess let's just go through the history of the prosecution, particularly the detail about Fininsen and they're called a Finsen, what they found out, what they hid from the defense and how that came uh and how you became aware of that and how it became part of the trial and then ultimately what it was looking like before the plea
(20:20) deal, why you guys decided to plea and what type of precedent this sets. Sure. Yeah. So, I mean, it's important to start the the the story with Fininsen and Fininsen is the financial crime enforcement network. It's the regulator as part of the Treasury that's in charge of money transmission and combating illicit finance and money laundering.
(20:44) uh in 2013, they were one of the only regulators to put out pretty clear and common sense guidance when it comes to uh Bitcoin and other cryptocurrencies. And they clearly stated in 2013 that in order to be a money transmitter as they saw it and get a license from them, you needed to take custody and control of the money or the the crypto or whatever you want to call it, right? So that was a key aspect to Fininsen that if you took custody and control like an exchange for example, then you were a money transmitter and you had to register with Fininsen and
(21:24) get a license. They uh then followed that up in 2019 and made it even more explicit and said if you're an anonymity provider, software provider that does not take control of customer funds, then you are not a money transmitter. Pretty straightforward.
(21:47) We as Samurai Wallet who started in 2015, so 2 years after the initial guidance, saw that and said pretty straightforward. We're not a money transmitter if we don't take custody. We've never taken custody. Not a single one of our tools we've ever created takes custody. We're not a money transmitter. Um, so fasting uh fast forwarding now to April 24th uh 2024 when the FBI conducts a pre-dawn raid on my house and arrests me.
(22:17) I come to find out uh that I'm charged with uh two crimes. conspiracy to commit money laundering and conspiracy to operate an unlicensed money service business, an MSB. And the agency that would get you would get the license from to be an MSB is Fininsson, the Financial Crime Enforcement Network.
(22:41) So, you know, I'm thinking about this and saying, well, Fininsson's always been really clear on their guidance that you can't be a money transmitter if you don't have custody. So, the government must be confused. The government must think that this is like a old school traditional mixer that would take custody and then send send the Bitcoin back out kind of like Bitcoin Fog did and all of these old school mixers. They must be confused about how this works.
(23:04) Uh because surely if they knew they wouldn't bring this charge. Uh and same with money laundering. How can one launder money if they never had the money? Right? It's a common sense reading of the statute would mean if you're a money launderer, you need to actually take the money to launder it. Um, so that was kind of our our understanding through Fininsen and part of our defense uh was going to be that the the guidance was so clear from Fininsen and the government never got in contact with us.
(23:37) The DOJ never tried to communicate with us and say, "Hey, we think you're breaking the law here." Right? So there's like a due process violation. You can't really be guilty of of of something. If you um if all of the guidance and and all of the literature and and the regulator saying one thing, then the government comes up and says, "Oh, actually what the regulator says doesn't matter. What we say matters.
(24:01) " That's a due process issue. So, one of the things that happens in a criminal trial that your listeners may or may not be aware of is a sharing of discovery. Uh and the government needs to provide to uh our lawyers all of the evidence that they have against us, including uh what's called exculpatory evidence, meaning evidence that's actually helpful to us, evidence that may exonerate us from the crimes.
(24:34) And this is um a legal requirement that they hand over all of this information. And so they handed over tons of information in discovery, but they didn't hand over everything we came to discover because my lawyers wrote to the government and asked them very specifically, did you ever have a conversation about Samurai wallet with Fininsen? And the government then had to reply, oh why yes we did. Uh and here's conversations that we had.
(25:04) Now the government was supposed to hand that over to us without us asking because you may not know what to ask. You may not know what questions to ask the government in order for them to send over the the evidence. So Supreme Court has said that the government has an obligation to hand over everything without being asked and to do so in a timely manner.
(25:28) We got that information a year after the prosecution had been going on. And when we looked at that information, that evidence, it was a bombshell because they had asked Fininsen 6 months before indicting us if they thought if Fininsen thought that we were operating a money service business without a license, which is again, this is the agency that gives out the licenses.
(25:52) And Fininsen said, "No, they they're not a money transmitter because they don't take custody of anyone's funds." Clear as day. But it didn't matter to the government because 6 months later they indicted us anyway with one of the charges being, you know, operating a money service business without a license.
(26:09) Even though the people who give the licenses said we didn't need a license. Um, so that was a huge bombshell and it was something that we thought was very important and um, you know, we needed to get the judge involved at this point to say, "Hey, one, why didn't you hand this over when you're supposed to?" and two, what other information aren't you handing over? We need to have a hearing about this and figure out exactly uh what evidence exists that you're not sharing with us.
(26:40) And what happened at that point? Well, we wrote that motion. Um it's called like a it's called a Brady violation when the government does that. It happens all the time in a criminal trial. Government almost never hands over the information they're legally required to hand over. Um, we wrote several motions at this point. One was about this Brady violation. Uh, one was a motion to dismiss the indictment.
(27:04) Um, and one was a, uh, motion to allow third parties to write to the judge and explain aspects of Bitcoin to the judge that the judge probably doesn't know about, right? So, Coin Center, for example, which is a Bitcoin advoc advocacy group in DC, they wanted to submit a submission to the court just to give the judge some more working knowledge about Bitcoin and non-custodial versus custodial and what that all meant. So, you have to get permission from the judge to to let these people submit this stuff, which is
(27:34) very common most of the time. Judges accept it because they want to know as much information as possible. Uh so the so we made those motions, submitted them to the court and then about a few days before we were meant to go and argue those motions in front of the court, our judge changed um suddenly, which is pretty unusual for criminal cases.
(28:02) Usually you get a judge and that judge sticks with you throughout the whole case. Um, so we got a new judge and this judge has a pretty pretty strong reputation as being a one a pretty heavy sentencer. So if you if you go to trial, get found guilty, she's giving you the max sentence uh almost every time and two was formerly a highlevel prosecutor in the southern district of New York herself. She was the head of the criminal division at SDNY. These are the same people who are prosecuting me now.
(28:28) Uh so you know very usual very prosecution judge a little concerning but we didn't really know what to expect. We hadn't seen her yet. Hadn't appeared in front of her. Uh so couple days go by and now it's time to appear in front of her for the first time and argue the motions that we had submitted to the court.
(28:49) And um I just want to take a moment to uh give your listeners an understanding of in particular the motion to dismiss um because that's that's an important point in this whole story. Um at this point of proceedings, you write a motion to dismiss indictment. And as the defendant, you have to at this point assume that everything the government has said about you in the indictment is true.
(29:14) Right? You're not there to argue the facts of the case because juries are the ones who decide facts. The judge is the one who decides the law. And in the motion to dismiss, you have to keep it solely on the law.
(29:33) So you're saying anything the government said is true and it should still be dismissed because of XYZ points of law. And we wrote a really phenomenal motion to dismiss. A lot of research, a lot of time went into it. And we found various uh precedent setting cases, Supreme Court cases uh that really tied into this situation beautifully. Uh two I I will mention briefly.
(29:54) One was in 1940 a sugar distributor was uh charged with a a conspiracy charge just like we were because he knowingly sold sugar to a bootleger who was creating alcohol which was illegal at that time. And the Supreme Court said you can't convict him of conspiracy just because he had some vague knowledge of a crime, right? He had to be actually part of the crime.
(30:18) And just by selling the al the sugar, that didn't make him part of the crime. And then the second one that was really compelling was a case from the '9s um a grow light manufacturer. So, usually you use like um uh grow lights when you're growing tomatoes or hydroponic systems, that type of thing.
(30:40) Um they got this guy on a conspiracy charge because he knowingly sold his grow lights to a marijuana um dealer or grower. And he even advertised his grow lights in High Times magazine, which is a marijuana enthusiast magazine. And he even had jokes, which the government is doesn't have a sense of humor. They do not like jokes.
(31:00) And he said to the person he was selling to, "I don't even want to know what you're doing with these slits." Right? And he got convicted on conspiracy in front of the jury and then it was overturned on appeal because again the appeal court said just mere knowledge isn't enough. You have to be part of the actual criminal act itself. Um so we were pretty confident in our arguments on this motion to dismiss.
(31:24) And if even if we didn't think it was going to work and she was just going to dismiss the indictment cuz that's pretty rare, we still thought that she would uh have an opinion on it and tell us why she's either approving or denying the motion, granting or denying it. Uh so we go into court, we have our all of our motions.
(31:43) Um keep in mind getting to this point alone has cost us about a million and a half dollars, right? Getting this motion, getting all the stuff together, very expensive process. and uh we're ready to argue and no argument. She says, "I don't need any argument. I've read all the motions. They're all denied." And that was it. Right. So, she didn't she didn't have any argument on the Brady violation.
(32:03) No argument on the motion to dismiss. No argument or or anything on the the amicus briefs for the third parties to give her information. All denied with one word and no oral or written opinion as to why she was denying it. So, we just had nothing to even work with. So, at that point when that happened, I kind of looked to my lawyer and was just like, "What is going on here?" Like, "This judge isn't even going to listen to our arguments.
(32:33) " You know, is he even isn't going to, you know, entertain a a a free and fair trial. This is not going to go well. And at that point, I think my my uh mindset shifted from we're going to put our version in front of the jury. We're going to have a fair trial. The jury is going to examine the facts and make a determination and I think we're in the clear to there's no way that this judge is going to let us put on the defense that we want to put on.
(32:59) We're not going to get a fair trial and the jury is going to have no choice but to convict us based on the evidence that they get to hear. Because again, people think everything comes out at a trial. It doesn't. The judge has so much control as to what evidence the jury actually ends up hearing. that uh I really felt that going to trial was going to end in a conviction and that conviction would be a 25-year sentence just knowing how this judge operates.
(33:28) Uh so that's that's where I my head was at at that point. Sup freaks, 2025 left many wondering, was this an underwhelming year for Bitcoin or the quiet setup for an extended bull run? On December 17th at 1 p.m. Central joined Preston Pish, Connor Brown, and Unchained for Bitcoin in 2025.
(33:46) A year in review, a concise breakdown of the macro trends and policy developments that truly shape the year. You'll hear what mattered most, where the market stands now, and what these inflection points reveal about Bitcoin's long-term direction. If you want clarity on where Bitcoin has been and where it's headed next, don't miss this event. So, go register now at unchained.com/tc. That's unchained.com/tc.
(34:03) Suffreak's healthcare open enrollment has started. It will roll through the end of January. Opt out of traditional health insurance, which doesn't care about you. It's impersonal. It's expensive. They deny an increasing amount of claims. Premiums are going up. You don't have to live this way. You can opt out. I opted out four years ago and joined Crowd Health. I've been a Crowd Health member.
(34:20) Very happy Crowd Health member for four years. I've had two children, a couple of health events in that time period. And Crowd Health has been there. You pay a monthly fee. You contribute to the crowd. We were paying $1,800 on Cobra as a family of three. Now we're paying around $900 a month as a family of five. And that's with Crowdalth and Direct Primary Care. You can opt out of health insurance.
(34:37) Go to joincrowalth.com/tfftc. You're going to get $99 a month for the first three months if you use the code TFTC. Join crowdhealth.com/tc. Did they give any reason for why they switched the judge midway through the trial? Nope. This is kind of mind-blowing. I mean, it's like, do we actually live in a in a free country? And I I think even outside of this case, I think it's becoming pretty clear that judges are exerting way too much power over the legal system in the United States. And the fact that she wouldn't even hear arguments to
(35:16) Yeah. Like what what is a judge what are they supposed they're supposed to be some sort of impartial arbiter of the law. And it's very clear in this case and many others that these judges have have a bias and ego and hubris that's really tied into their careers. Yeah.
(35:42) I think especially in the southern district almost all the judges there are um formerly prosecutors and I think it's true broadly in the federal system. uh and which there's just a I understand they have to come from somewhere you know so you're going to inevitably have you know prosecutors become judges but there's a bias just implicitly in that right where oh I was a prosecutor I know how it works there's some credibility that the prosecutor has if there wasn't actually a case here the prosecutor wouldn't have brought it all that kind of builds in into the system when it really shouldn't be that way you know there it should
(36:14) nonbias. It should be let's figure out the truth. And what I've discovered in this entire process is the truth does not matter. The truth is inconsequential to a criminal trial, a federal criminal trial. Uh the prosecutor has decided pre-indictment and they will, you know, force feed any evidence they can get into their narrative and that's that.
(36:45) even if their narrative becomes untenable, they'll never admit that and they will go as far as they can go, even if they know it's not the truth. And that it, you know, again, I knew there was something wrong with the justice system. We all kind of know there's something wrong with our justice system, but you still think that, well, it's probably the best in the world, even with all its problems, and it's probably, you know, one of the most fair. Um, it's probably better than a lot of other places.
(37:11) And then you go face to face with the Department of Justice and you go, "Oh, this is a clown show. This is a circus." And uh it's not just me. I mean, this is happening to a lot of people. Um you know, so it's it was definitely a a sobering experience. Yeah. An indictment on the state of uh the United States, particularly the justice system. Yeah.
(37:37) like what what uh what is this contract we're engaged in with the federal government if the Department of Justice feels very emboldened to not show impartiality and just put up judges who are going to dictate the way they think things should be dictated. I mean this gets to the broader question of the times we live in. I mean obviously everything's getting hyperdigital.
(38:02) surveillance state is being erected quicker than ever now, especially with AI um all around us and many people are asleep at the wheel not really noticing that it's happening. Even some people are I think intuitively and implicitly understand that it's happening but I don't think they understand the scale or the desires of the federal government and what they would like to cattle herd individual citizens not only here in the United States but globally into so they can They can tag, track, and bag whoever is is stepping out of line. And something
(38:36) as what for the longest time for human history was innocuous financial privacy. I think they're trying to make an example out of you specifically just to send a message of chilling effect like hey there will be no privacy. Yeah, I I agree with that completely. you know, so for the again for the longest time we we operated openly for 10 years, right? So it's not like we just came on the scene and they took us out, you know, we we've been operating openly for 10 years and um we we thought and I still think that what we were doing was legal, right? We didn't take
(39:14) custody and we figured out a novel way of providing uh very strong privacy protection on Bitcoin without taking custody and they did not like that, right? Because they could go after Bitcoin fault and they could go after the old school mixing uh tools because all those tools took custody and they had existing laws uh in order to to get them and they got them fairly easily, right? But then suddenly all comes Biden's Department of Justice um which really had a negative view of crypto and they needed to figure out a way to take us out
(39:55) when we didn't have those same issues, right? We didn't take custody. Guidance was on our side. Fininsen was on our side. How do we get them? And at that point it kind of uh my discovery is that precedence, law, truth, none of it matters. If they want to take you out, they will take you out.
(40:21) And doesn't matter what the regulator says. It doesn't matter how the actual thing works. It doesn't matter, you know, that that um what they're going to do is upending, you know, years of precedence. They don't care. They're going to do it and try to get away with it.
(40:38) And unfortunately in this case, they managed to get away with it, right? Um the what I pled to uh unlicensed money transmission is the charge that Finn said and said I didn't need to be licensed and no one cares about that in the system. You know, they got their win. What I mean it's again incredibly scary. like what do you think needs to happen to to force these institutions to care about this stuff? Broadly, I don't know.
(41:07) I think on a micro level, the Trump administration needs to clean house at the Southern District of New York. Uh I think that's really one of the most corrupt US attorneys offices in the country. And it's something that President Trump should know himself. He's dealt with them.
(41:28) They've come after him, right? And you know, they they've ignored so much about what his administration said they wanted to do, right? So, we had Todd Blanch, the assistant um attorney general, write a memo, the Blanch memo that was I mean, it couldn't have been about any other case other than Samurai Wallet and Tornado Cash. It was like written about us, this memo.
(41:53) and it said mixers, tumblers are uh software developers are not going to be held responsible for the crimes of their end users. We're going to go after the actual criminals. Clear as day. Southern district ignored it. They ignored their boss, the deputy attorney general, and they continued ahead.
(42:13) Just the fact that we were brought under indictment in the Southern District of New York is crazy because we hadn't been to New York, right? and their claim is, well, you know, uh, someone in New York could use the app, so we have jurisdiction. It's insane. Uh, so I mean, I think that Trump and the administration should take a cold hard look at the Southern District, uh, which is just they have their their nickname is the sovereign district of New York because they do what they want and that's they've done that for a long time. Uh, getting them under control, I think, would be a good start. Um, besides that, I don't know. I
(42:46) I mean I think it's just a inherent problem with our system. Yeah. No, the fact that they got the case in the first place, you make a very good point, is astonishing, you guys. You know how they did it? They got they sent some FBI agent into the streets of Manhattan who opened up his phone, downloaded Samurai Wallet, made a uh transaction into Whirlpool, and that gave them the jurisdictional ability to bring charges against us.
(43:15) That sounds like a conspiracy, right? It's crazy. It's crazy. We had never done business in New York. Are they allow Are they allowed to just contract FBI agents to go do this stuff? Apparently, I think they they they can do whatever they want, you know, and even if what they do ends up being uh illegal, which has happened, they have prosecutorial immunity. You can't do anything about it, you know. So, they are a protected class.
(43:43) Yeah. And I don't know, I forget if I covered in the newsletter, but I did a video last week on this case. And just juxtaposing the treatment that you've received um in the numbers that they they cited in the in the prosecution. I think it was like $236 million in volume and gone through Whirlpool.
(44:08) And then you look at just JP Morgan alone since 2000, they've paid $40 billion in fines for way more uh quote unquote money laundering. Um and no CEOs, no executive levels employees, no raids, nothing. It's just the cost of doing business. I mean, yeah. Yeah. I mean, I think JP Morgan, Chase, all of those guys would have killed for a ratio that we had, right? So here here's the government's numbers. I I haven't checked them. I don't know if these numbers are accurate or not, but this is what the government is saying.
(44:40) So in in the indictment, they said 2 billion dollars worth of unlawful transactions, not elicit, unlawful, went through Samurai Wallet. What does that mean? The government's contention is that Samurai Wallet was a financial institution and as a financial institution has the obligation to perform KYC and AML on all of its users.
(45:05) And because we didn't perform any KYC or AML on our users, every dollar that went through Samurai wallet was unlawful. That's why the total amount of 2 billion is all unlawful. Then of that two billion they say 237 million were the proceeds of illicit activity of crime and that was the amount that we allegedly laundered by creating Samurai wallet. So 237 million out of 2 billion.
(45:34) Okay that's like 10%. Right? JP Morgan, Chase, HSBC would kill for 10%. their numbers are way higher in terms of illicit stuff and they know about it too, right? And they court it and that's why they keep getting these fines and you know uh so the government was saying that 237 million Bill and I would be responsible for paying in restitution to the government.
(46:08) They knew full well we never had a scent of that 237 million because they acknowledged that Samurai Wallet was non-custodial. We never had it. But they were going to make us pay that 237 million to them in the event of uh a conviction, which essentially is a life sentence, right? So a conviction is 25 years. And when you finally get out after 25 years, you have a $237 million debt on your head that you need to pay the government. You can't travel. You can't leave.
(46:35) You're under basically uh supervised release for the rest of your life. um they knew full well that we couldn't pay it. So what they did was as part of the deal they said well Samurai Wallet earned 6 million in fees over the course of 10 years that you operated.
(46:58) So you pay us that 6 million that you earned total and we'll consider the $237 million fully satisfied. So that's part of the deal we ended up taking. And I saw you I watched you talk about this on pod 256, but I think it's important to re reiterate here. I mean the the means by which uh the Department of Justice is attributing that illicit activity that went through Samurai is murky in and of itself with the chain surveillance tools.
(47:29) Um chain analysis historically is not as accurate as they claim to be. Definitely. and you know they can't show their work. Uh they they they basically get a report from you know chain analysis or Elliptic or one of these other tools and they run with it and no one can actually say well how did you get to that conclusion? They say the Silk Road coins were going through whirlpool um but we already know that the Silk Road cluster that chain analysis and elliptic and all these companies use is pretty polluted.
(47:59) stuff that has no relation to Silk Road gets clustered in and tied into being part of Silk Road. But we don't know, and that would have been something that we would have had to deal with at trial trying to figure out and cross-examine their experts. But we already know from the Roman uh Sterlingov case and Bitcoin Fog that you can't cross-examine those people because they'll they'll make a a case of national security and that's it.
(48:24) they use those magic words and suddenly our our our you know our system our constitutional right to confront our accusers goes out the window. Uh so that would have been an uphill uh challenge at trial. Uh but one that we were willing to to fight um knowing that it's a it's a tough thing to do, right? Because they get to say these came from North Korea, these came from the Silk Road, these came from so and so. And then we have to go up there and say, "No, they didn't.
(48:56) " And the only way you can do that is by cross-examining that witness, saying, "Well, how did you come to that conclusion? What's the scientific method you use? What's the error rate uh of of this this heristic that you're using?" And you're not allowed to do it. Uh so that would have been that would have been tough.
(49:16) But I mean, even if that's true, and it could be true, right? I would not surprise me if North Korean hackers used Whirlpool. wouldn't surprise me because of course bad actors are going to seek out privacy tools. They always have. They use tour, they use VPNs, they use signal, people use technology and bad actors use technology. So that wouldn't have surprised me.
(49:35) Uh and and that's I think really the key to the government. Just my mere knowledge that bad actors could use my tool meant that I was guilty. That's where they got me. They said, "You knew and you continue to do it. Therefore, you conspired with them by you building this software knowing that bad actors could use it.
(49:54) You conspired with those bad actors to create a moneyaundering empire, right? Yeah. I mean, and this is the craziest part, right? because 90 I mean even going off the government's numbers which may be um which may be exaggerated to the higher end because of the murky chain heristics chain surveillance heristics that we just discussed like the fact or the potential for them to shut down these technologies just just come in with a rubber stamp an iron boot and stamp them out because there are uh nefarious indiv individuals also using them is completely insane. I mean, going back to what we were talking about earlier about
(50:39) the the sort of security risk that's introduced if people know exactly how much Bitcoin you have and in which wallets it sits in. The fact it would prevent law-abiding, privacy conscious individual citizens from accessing this technology because a few bad actors may be using it as well is completely insane. Yeah.
(51:02) And I don't know, it's it's um I don't know. It's I try to be optimistic, but it's like cases like this, your case particularly, it's just like holy crap, what uh what world are we living in? Does the government even are they even going to try to pay lip service to the fact that we live in a free country and as individual citizens we have inalienable rights that that we are god-given rights that we can defend and and leverage? It doesn't seem like that's the case anymore.
(51:37) No. No. Not not in that court at least. Um and not with those those prosecutors. Like I said, they they have an open disdain for the rights of privacy and being secure from search and seizure. Um an open disdain uh for financial privacy. And not just them, the judge as well. You know, the judge as well.
(51:56) So, it's a uh a losing battle in the Southern District of New York. That's that's for sure. And it's just I I want to make it very clear that the government didn't charge any of these criminals. Didn't go after any of these actual criminals, right? They went after Bill and me who made a tool, but the alleged hackers and moneyaunderers and this and that have not been charged and they didn't have someone to bring up. And this is why they charged us with conspiracy instead of actual money laundering.
(52:30) Because if they would have charged us with actual moneyaundering, they would have had to bring up somebody to say, "Yeah, I I sent my money to Keone and and he laundered it and we agreed to do this." They didn't have that person because that person never existed because I obviously did not get into this to create a quote unquote criminal moneyaundering enterprise, you know, and if I had, I s certainly would have wouldn't have only earned $6 million over 10 years, right? That's not a moneyaundering enterprise.
(53:00) That's a pretty modest amount to have earned over 10 years. and one and something that I'm very proud of and you know building an open-source company an open source tool and monetizing it in a way that we could at least keep it going for a decade is a point of pride that I have and that's something they absolutely will not take away uh from me.
(53:27) I'm proud of what we what we built at Samurai and you should be you should be extremely proud because these are extremely important tools that that people need and again it's just crazy that you bill others building non-custodial software that helps people attain privacy on Bitcoin and other chains for that matter have to feel like actual criminals and and the fact that they didn't bring anybody forward it's just incredibly poetic in a way.
(53:56) Um, in this no victims, no victims and no criminals. Yeah. So, obviously now you guys pled down, you're facing 5 years in a cage. Sorry for putting it that way, but I think it's important to be to be blunt here. Um, and it looks like the only potential to avoid this is a pardon from President Trump. um what is the case? What what would what would you put forth as the case for a pardon from president? If you could speak to the president directly, I know he listens to this show um quite frequently. What would you say to him?
(54:35) I think I I don't know what I would say to him exactly, but I think the president has an innate um barometer for fairness. He knows what's fair and what isn't fair. He knows what's injust and what's just. he had himself has been the target of injust lawfare used against him and his family.
(54:57) Right? So I think he knows the what it looks like when he sees it. And if he understood um this case, he would see it is profoundly uh unjust. And um I think the strategy at this point is to raise enough noise and awareness around this campaign, around this case to get it in front of someone in the administration who could bring it to his attention.
(55:26) Um, he said he wanted the the US to be the crypto capital of the world. Uh, so do I. Uh, but you can't do that if you're putting your builders in prison, right? And he he wants um the his Department of Justice, Todd Blanch, wants the Department of Justice line prosecutors to focus on crime, which would be great, not focus on builders uh and and hold them accountable to for their users actions with him 100%.
(55:56) But his US attorney's offices aren't following that um directive. He wants a strategic Bitcoin reserve and he wants if you do have to forfeit Bitcoin to the government in a criminal action like we had to, he wants that Bitcoin to become part of the strategic Bitcoin reserve.
(56:16) Well, I hope that he's aware that the Southern District of New York disregarded that executive order and immediately sold the Bitcoin that we forfeited to them. Uh so bypassing his executive order for strategic Bitcoin reserve. Yeah. Yeah. It's lawless over there. They do what they want and the president needs to know that they do not respect him. They do not respect his administration. They do not respect main justice. They do what they want there and they get away with it constantly.
(56:41) So, I think the president can restore balance to this, can restore uh the injustice that has occurred in this case by granting Bill and I full pardons and then turning his attention to the Southern District of New York. Yeah. If even if uh you and Bill when you get pardoned, we're going to manifest it. when you and Bill get pardoned.
(57:11) Um, does the plea deal is does that still set a precedent that could be used in in future cases? No. No. No. That was that was a consideration. So, the way court precedent actually works is true precedent doesn't get sent uh doesn't get set at the district level, right? And that's where we were at. It gets set at appellet and above. Uh so if we were found guilty for example at a trial criminal trial that wouldn't be precedent it would be like I I forgot the exact term they use like persuasive authority I think is the exact word they can use.
(57:42) So the concept is that a district judge is not bound by the decision of any other district judge right so they they can they can look at that case and say nah I disagree or they can go yeah I agree. Um, so we would have had to appeal it up to the appeals court uh to get actual precedent.
(58:03) And this is what Roman Storm is doing, right? So Roman Storm with tornado cash, he went to trial. I don't know if they offered him a deal or not, but he went to trial and he was found guilty on the charge that Bill and I pled to um same charge, unlicensed money transmission, and it was a hung jury on moneyaundering. Um, so he gets to appeal that conviction of unlicensed money transmission and he's going to appeal it and he's going to raise at appeal the fact that it's a as a matter of law, you cannot transmit money if you've never had the money to begin with. And I think he has a pretty good shot on on appeal
(58:38) there because the appeal court, they look at this sort of thing. Um, so that's where precedent will get set when he does that. Uh, for us, because we didn't go to trial and we took a deal, there is no precedent, nor is there any persuasive authority. It's just done. It's a deal. But all that said, the government doesn't care about precedent. If they want to go after you, they will go after you.
(59:09) They There was no precedence in going after Samurai Wallet. There was no precedence that a unlicensed money transmitter could be non-custodial. Everything was said otherwise and that doesn't matter. They will make precedents when they want to make it. They will spin things when they want to spin it. So we give a lot of weight to this legal concept of precedence.
(59:28) It doesn't matter. They do what they want when they want. And unfortunately that's just true. Oh, it's [ __ ] up. How um how has this affected you? I mean, obviously, it's been a long couple of years. What how are you holding up? What um what's gotten you through uh through this? How are you how are you how's your mental state approaching uh the time at which you have to report to prison? What what does this do for the individual? Yeah, I mean it's tough, you know. Um I I tried to look on the bright side of things, right? It could have been worse.
(1:00:04) I could have been held in pre-trial detention, uh, which would have been difficult to, you know, aid in my defense. I was lucky that I was able to get bail and go home, um, and spend time with my family and my wife. So, I try to look on the bright side of things, but even even that is tough. You know, you're you're sentenced to to uh home incarceration, meaning you can't leave the four walls of the house.
(1:00:30) Um, and it's, you know, for someone who is is not used to that, right? is used to being able to go on a whim, go shopping or go to the park or go for a hike or a walk. That getting used to not being able to do that does take some time. Um, and I guess it would be quite easy to kind of go stir crazy, right? And I joke about it because um, like they didn't get me on on COVID lockdowns. Like I completely disregarded that and I would go out for walks and I would do whatever I wanted.
(1:01:01) I wasn't going to be stuck in my house then. So I laugh at my wife. I say, "Well, they finally got me. You know, they they finally got me into lockdown." Um, so I guess, you know, I guess some people did experience that, so they know what it's like being cooped up inside. Um, so it's just been, you know, trying to fill the time.
(1:01:21) Uh primarily I think the biggest thing to get used to was for 10 years I would get up every day 5 or 6 in the morning and essentially start work work on Samurai talk to Bill because he was in Europe so it was a perfect kind of uh time zone thing start talking to Bill start talking to the other people on the team and just get moving. How are we going to change Bitcoin today? How are we going to you know uh deploy software uh in a way that no one has seen and just go 100 110%. And we did that for 10 years.
(1:01:52) Just suddenly nothing right. Nothing to work on, nothing to build. Can't talk to my friend who I've talked to hours a day for 10 years. Can't talk to all the other people involved in Samurai. Um completely isolated. Uh that was that was tough getting used to and I think I just filled I filled my day with reading with learning new stuff, playing around with um you know little projects I could do on my computer, coding ideas that I may have had throughout the years and just tried to fill fill the time and and now it's just a waiting game. Uh I
(1:02:31) report on December 19th, so I have uh you know uh 10 days. Um so it's just spending time with my wife and my family and and uh making sure everything logistically is ready for me to be away from the house, the household. Yeah, I'm sorry you have to go through this. It's really demoralizing. can't imagine for you but even um for someone who cares I mean deeply about Bitcoin but just human liberty generally at the end of the day like it's insane to me that you and Bill are going through this and we even have to have this type of conversation in 2025.
(1:03:16) Um yeah, I mean if anybody who's listening to this is close to the administration, I think Keon has made a pretty uh cogent and clear case here that there this was not justice at the end of the day. If anything, it was uh unjust what's what's happening.
(1:03:41) It is unjust what's happening to you, Bill, and others in the non-custodial privacy space across crypto right now. Um, and I I think this is a critical sort of inflection point uh because it seems pretty clear that governments around the world want to lean into this technology, Bitcoin, crypto, a lot of them are focused on stable coins and other things, but um we need to make sure that we preserve privacy and liberty in this digital age with these digital currencies.
(1:04:13) And if we stomp that out at the beginning, we're 17 years in, but it's still the very beginning of humanity leveraging these technologies, it's not a very hopeful future. In fact, it's bleak. Um, very despotic. Uh so if anybody's listening has the ear of the administration, I think this is a critically important um topic to to really lean into and and focus on and make sure we get this right for not only ourselves but our children, grandchildren, people that will be born decades from now.
(1:04:50) Yeah, I I agree completely. you know, it's um I've always said that Bitcoin um broadly, I guess crypto in general, but Bitcoin broadly has a potential um to advance human freedom like no other technology before it. But the the same uh side of the coin, it has the ability to become a surveillance panopticon and completely enslave us.
(1:05:21) And we really have to be vigilant and do the right things to keep that from happening, right? We do not want a totally surveiled open network, right? We want private digital cash and we can have it. We're so close to having it and we need to make sure that that's what our focus is. Uh because the alternative is is is very dreary. Truly is.
(1:05:53) Keon, thank you for um your hard work on Bitcoin Samurai wallet for more than a decade now. Uh and wishing you, Bill, everybody really uh the best of luck and hopefully sensible individuals uh rise up and and write this wrong uh issue you a full pardon, you and Bill full pardons. Roman storm as well. Um even though he's appealing his case right now, I think again to what you said earlier, if we want to be the Bitcoin/crypto capital of the world, stuff like this cannot happen.
(1:06:29) You're not going to be the Bitcoin capital of the world. If the builders are being thrown in cages for writing software, open- source software, non-custodial software, uh that just simply enables people to use Bitcoin smarter in a more private way. Yeah, absolutely. We will link to the uh change.org petition um bill and keon.org as well, Logan.
(1:06:58) Um, and yeah, I admire the um the strength that you're showing through all this. I've been watching a lot of the interviews that you've uh been a part of the last couple weeks and it is incredibly impressive that you're um as put together and sort of steadfast as you have been the last few weeks.
(1:07:20) So, you're uh you're much stronger than I may be uh if I were in a similar situation. So, I appreciate it, Marty. Thank you for having me on. All right, make some noise freaks. Peace and love. Okay, thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there.
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