{"id":3027,"date":"2025-04-17T16:16:49","date_gmt":"2025-04-17T16:16:49","guid":{"rendered":"https:\/\/digkrypton.com\/index.php\/2025\/04\/17\/crypto-privacy-legalized-tornado-cash-and-samourai-cases-suggest-uncertainty-remains\/"},"modified":"2025-04-17T16:16:49","modified_gmt":"2025-04-17T16:16:49","slug":"crypto-privacy-legalized-tornado-cash-and-samourai-cases-suggest-uncertainty-remains","status":"publish","type":"post","link":"https:\/\/digkrypton.com\/index.php\/2025\/04\/17\/crypto-privacy-legalized-tornado-cash-and-samourai-cases-suggest-uncertainty-remains\/","title":{"rendered":"Crypto Privacy Legalized? Tornado Cash and Samourai Cases Suggest Uncertainty Remains"},"content":{"rendered":"

Bitcoin Magazine<\/a><\/p>\n

Crypto Privacy Legalized? Tornado Cash and Samourai Cases Suggest Uncertainty Remains<\/a><\/p>\n

<\/div>\n

Last week, Deputy Attorney General (DAG) Todd Blanche sent a memo<\/a> to employees of the Department of Justice, directing the agency to stop prosecuting mixers, exchanges, and \u201coffline wallets\u201d for the criminal conduct of their users.<\/p>\n

Understandably, the community broke out in celebration. Privacy is now legal again! Some proclaimed. #FreeSamourai! Others demanded. DOJ ends \u201cregulation by prosecution\u201d, media outlets headlined, referring to the memo\u2019s title, as companies who had previously left the US due to regulatory uncertainty announced plans to return. This will change everything, appeared to be the general tenor.<\/p>\n

But does the DAG\u2019s memo actually<\/em> change anything? Scholars are not so sure.<\/p>\n

\u201cDid DOJ Bless A Crypto Free-For-All? Think Again,\u201d writes<\/a> the industry publication Law360, read by over 2 million legal professionals around the world. \u201cThe platforms could still face enforcement actions if investigators uncover evidence that they knew customers were using digital assets to further transnational crime.\u201d\u00a0<\/p>\n

Namely, the memo instructs the DOJ to focus less on regulatory violations, and more on \u201cthose who use digital assets in furtherance of criminal offenses\u201d, such as terrorism, organized crime, and hacking, as well as narcotics- and human trafficking.\u00a0<\/p>\n

While the memo reads that \u201cthe Department will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations,\u201d there appears to be very little clarity as to whom the DOJ considers to \u201cuse digital assets in furtherance of criminal offenses\u201d \u2013 individuals thereby excluded by the DAG\u2019s statements.<\/p>\n

\u201cA handful of pending, high-profile prosecutions could soon offer clues on the DOJ\u2019s approach. They include a money laundering case against Roman Storm,\u201d Law360 writes.<\/p>\n

Both in the prosecution of Storm, as well as in the prosecution of Samourai Wallet developers Keonne Rodriguez and William Hill, the agency is currently claiming that the entire point of developing their respected privacy services was to enrich themselves on criminal activity, placing them well within frame of the memo\u2019s exceptions.<\/p>\n

Notably, the DAG\u2019s memo specifically excludes a subsection of USC 18 \u00a71960, which is \u201cat the heart of the Storm and Samourai Wallet cases,\u201d posted<\/a> CEO of the DeFi Education Fund Amanda Tuminelli on X.\u00a0<\/p>\n

Due to this exclusion, the prosecution of both Tornado Cash and Samourai Wallet developers will continue to set precedent over whether developers of non-custodial services can be held liable for the actions of their users, and must further deploy comprehensive anti-money laundering frameworks as required of any money service business, including know-your customer checks.<\/p>\n

\u201cWe will wait to see what happens with the Tornado Cash and Samourai Wallet prosecutions,\u201d writes<\/a> CoinCenter\u2019s Peter van Valkenburgh on X. The memo is \u201cgreat news, but important not to over read this,\u201d writes<\/a> Bitcoin Policy Institute fellow Zack Shapiro similarly.<\/p>\n

Both prosecutions effectively focus on the obligations software developers face when having no control over the funds their software transmits, into which the DAG\u2019s memo appears to give no insight. In fact, the DAG appears to have intentionally avoided the terms \u201cnon-custodial\u201d or \u201cunhosted,\u201d as non-custodial wallets are commonly referred to in Government circles, instead referring to \u201coffline wallets\u201d in its statements.\u00a0<\/p>\n

Many in return are now wondering how software developers may implement KYC checks when dealing with non-custodial wallets if the prosecution of either developers is successful, and non-custodial services like Samourai and Tornado Cash are deemed to fall under money service business licensing requirements.<\/p>\n

Former CFTC chair Timothy Massad gave some insight into how the KYC of the future may look when applied to Bitcoin in an interview<\/a> with Bitcoin Magazine last week, stating that he believes ensuring that Bitcoin is not used for illicit purposes will probably involved some form of \u201cdigital identity,\u201d as well as \u201csmart contracts\u201d which \u201cwouldn\u2019t process a transaction unless you could provide that [digital identity].\u201d<\/p>\n

What may sound like a distant dystopian future is currently being mandated in the US, which will require US Americans to present a Real ID compatible drivers license for domestic air travel starting May 7th, which is intended to be expanded into a fully fledged digital identity once the document is widely enough adopted.<\/p>\n

This is a guest post by L0la L33tz. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.<\/em><\/p>\n

This post Crypto Privacy Legalized? Tornado Cash and Samourai Cases Suggest Uncertainty Remains<\/a> first appeared on Bitcoin Magazine<\/a> and is written by L0La L33Tz<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine Crypto Privacy Legalized? Tornado Cash and Samourai Cases Suggest Uncertainty Remains Last week, Deputy Attorney General (DAG) Todd Blanche sent a memo to employees of the Department of Justice, directing the agency to stop prosecuting mixers, exchanges, and \u201coffline wallets\u201d for the criminal conduct of their users. Understandably, the community broke out in […]<\/p>\n","protected":false},"author":0,"featured_media":3028,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-3027","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin"},"acf":[],"_links":{"self":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts\/3027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/comments?post=3027"}],"version-history":[{"count":0,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/posts\/3027\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/media\/3028"}],"wp:attachment":[{"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/media?parent=3027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/categories?post=3027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digkrypton.com\/index.php\/wp-json\/wp\/v2\/tags?post=3027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}