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Yesterday, the US Department of Justice (DOJ) loaded Keonne Rodriguez and William Lonergan Hill, co-founders of Samourai Wallet, a privacy-focused bitcoin wallet that also serves as a mixer, to launder money and operate an unlicensed money transmission business.
Many, including activists and human rights defenders, spoke out about the importance of this legal action soon after the news broke.
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A monumentally bad day for Internet privacy
The implications of this are so terrible.
A true “before and after” https://t.co/ou6CgT9E0T
– Alex Gladstein (@gladstein) twitter.com/gladstein/status/1783219837969576050?ref_src=twsrc%5Etfw”>April 24, 2024
Lyudmyla Kozlovska, president of the Open Dialogue Foundationwhich educates policymakers and regulators about how bitcoin mixing services are tools for pro-democracy activists who live under authoritarian regimes and need to preserve their anonymity, expressed concern about a broader international effort to ban privacy-preserving tools related to bitcoin.
“Looking at this event and the regulatory language in G7 countries, including the crypto-asset-service-providers”>AMLR approved today by the European ParliamentWe can already see the beginning of this process to criminalize private payment tools,” Kozlovska told bitcoin magazine.
“Crimes can be committed with any technology, but this is no reason to criminalize or prohibit by definition a private payment tool, and especially its developers,” he added.
“Since law enforcement agencies were able to identify a money laundering crime using this particular wallet, it means that they have all the means to detect such crimes and there is no need to criminalize such technology or its developers.”
Kozlovksa went on to explain how most major money laundering schemes occur through traditional financial rails and exist in the form of expensive real estate deals or payments for consultations with former high-ranking government officials.
Anna Chekhovich, CFO of Anticorruption Foundation and leader in non-profit bitcoin adoption in the Human Rights FoundationHe also trusts bitcoin mixers and is concerned that the powers that be are ignoring human rights activists who need to use this technology for their own safety.
“As an activist, I don't like the trend of them trying to control tools like mixers that give us privacy, because they are crucial for those who fight against dictatorships: activists, human rights defenders, freedom fighters,” Chekhovich told the magazine bitcoin.
“At the Anti-Corruption Foundation we use mixers because we need to protect (the identity of) our donors. We are responsible for the safety of our donors because we encourage them to support us financially and by supporting us they risk being imprisoned for up to eight years. We have the enormous responsibility to do everything possible so that this does not happen,” he added.
“We also need mixers to protect (the identity) of the recipients of our funds.”
That said, both Kozlovska and Chekhovich implore those running other bitcoin mixers not to invite bad actors to use their services in the same way that the founders of Samourai Wallet did.
In the following tweet, which was cited in the charges against Rodriguez and Hill, Samourai openly encouraged Russian oligarchs to use Samourai's mixing service to circumvent sanctions.
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Welcome to new users of the Russian oligarch Samourai Wallet https://t.co/WBhB6J89SR
– Samourai Wallet (@SamouraiWallet) twitter.com/SamouraiWallet/status/1542533704635015168?ref_src=twsrc%5Etfw”>June 30, 2022
“This is total childishness,” Kozlovska told bitcoin magazine. “This rhetoric certainly gives more reason to attack both developers and private payment tools.”
Chekhovich echoed and expanded Kozlovska's point of view.
“I absolutely do not support or tolerate those who encourage Russian oligarchs to use bitcoin or any bitcoin-related tools, such as mixers,” Checkhovich told bitcoin Magazine. “It was wrong to say those things, and it was not only bad for the owners of the platform, but also for the bitcoin community at large.”
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