An announcement from the Justice Department today reported the arrest and charging of Keonne Rodriguez and William Hill for operating Samourai Wallet, described as "an unlicensed money transmitting business" involved in "unlawful transactions."

This raises a big middle finger to the Justice Department. Samourai never held user funds, controlled them, or made transactions on behalf of users. It's a fully self-custodial wallet, always has been, and has stood unwaveringly by that principle since day one.

The charges include conspiracy to commit money laundering, with a maximum 20-year sentence, and conspiracy to operate an unlicensed money transmitting business, with a maximum 5-year sentence.

This is utter insanity.

Let's dissect some of the language used in the press release:

"Samourai unlawfully combined multiple unique features to execute anonymous financial transactions valued at over $2 billion for its customers."

What does "unlawfully combined multiple unique features" even mean? Writing code that rearranges 1s and 0s? Creating data pieces on users' devices, signing them, then sending them to the internet for others to voluntarily download? This is protected free speech. "Unlawfully combining unique features" is essentially saying "you spoke wrongspeak." That's insane.

"These private keys are not shared with Samourai employees, but Samourai operates a centralized server that, among other things, supervises and facilitates transactions between Samourai users and creates new BTC addresses used during the transactions."

Samourai doesn't create user addresses; users' wallets do. Their servers have no role in generating addresses. Also, framing it as "supervising and facilitating" transactions is misleading. Samourai has no control over transactions; it merely passes messages. At no point does Samourai control or influence user funds.

At no point in the process does Samourai gain control over users' funds, influence where they're spent, or prevent users from spending them.

The indictment also claims that "Samourai" automatically mixes outputs. No, users' wallets manually connect to the backend coordinator. After user authorization, wallets independently participate in proposing transactions. This isn't automatic.

They claim Samourai, as a money transmitting business, should apply KYC and AML regulations. They're not a money transmitter. They don't take custody or control over users' funds. To say they're a money transmitting business and must enforce KYC and AML is insane.

Samourai isn't a money transmission business; it provides delivery, communication, or network access services. FinCEN clarified in 2019 that these services don't make one a money transmitter.

This case is absurd and sets a dangerous precedent. It's vital to call out this overreach. The impact on self-custodial tools could be disastrous. It's time to focus on serious issues instead of petty Twitter feuds.