Samourai Wallet founders arrested and services seized
A serious political attack on the privacy and liberty of all
This article is part of a series in which I will recount the history and current developments of the insidious war on encryption and encrypted communications.
Read the previous episodes of the Crypto Wars here.
Yesterday, April 24, 2024, the founders of Samourai Wallet were arrested on charges of money laundering and providing unauthorized money transmission services. The arrests followed an investigation by the U.S. Department of Justice, with one of the founders arrested in Portugal thanks to cooperation from European law enforcement authorities.
Alongside the arrests, web domains and web services related to their operations were seized, and Google was ordered to remove the app from its store.
Here is the press release from the DoJ: Link to DoJ press release
For those unfamiliar with Samourai, some context: Samourai is a mobile Bitcoin wallet known for its strong focus on transaction privacy. Particularly, the Samourai team developed a "mixing" service called Whirlpool, which was used by tens of thousands of Bitcoins to mix funds before sending transactions, thereby enhancing "forward privacy" by obscuring the link between the input (original transaction) and output (transaction to the recipient).
For Samourai Wallet users - how to restore funds
Before proceeding, it's important to note that the funds of Samourai Wallet users are safe. The wallet is non-custodial: private keys were never held by the company, and although the wallet has been blocked, funds can be restored at any time and quickly using other wallets compatible with the BIP-39 standard, such as Electrum or Sparrow.
To restore funds and operate normally through Sparrow, I recommend this guide, complete with explanatory images for step-by-step wallet restoration. It is indeed very simple.
The arrest of the founders is not random
Although investigations began around 2022, it is no coincidence, in my opinion, that the founders of Samourai were arrested at this particular historical moment.
Just a few weeks ago, the development team had announced two major advances for Bitcoin privacy: Bitcoin <> Monero swaps and the decentralization with peer-to-peer agents of their Whirpool mixing service.
Samourai was poised to become de facto the world's best service for Bitcoin privacy and would have enabled users to manage their funds in a secure and privacy-friendly manner, simply and functionally.
Yes—I realize that among those who read these words, there may be people from the other side. Samourai has always been ostracized by a part of the Bitcoin community that highlighted its technical flaws and claimed that the "SCAMurai" team was acting in bad faith. But I don't care.
The facts are clear: yesterday the founders of Samourai were arrested. In this sick world, those who are pursued by the diabolical force of the State can only be on the right side, as we have already learned from Ross Ulbricht, John McAfee, and many others. There is a reason why Satoshi Nakamoto disappeared from circulation.
Therefore, it is evident that the attack on Samourai has a political nature. The U.S. government does not care about money laundering; they are the first to launder money. They are interested in preventing substantial leaps forward in financial privacy (and thus freedom) that would limit their ability to extract resources from the masses of tax-paying slaves.
It is also no coincidence that just these days the Biden administration has renewed the intent to introduce an "unrealized gains" tax for the wealthiest individuals.
In the United States, there are undoubtedly many "crypto millionaires" who hold funds, perhaps in cold storage without ever converting them into dollars. Such a tax would specifically target this category of people. It is clear then that the first thing to do is to eliminate any tool with which to obscure the funds and identities of those who possess them.
The Samourai team had seen far ahead when in January they wrote a letter to the director of the Financial Crimes Enforcement Network (FinCEN) specifically about the new rules proposed for fighting terrorism and money laundering, identifying Convertible Virtual Currency Mixing (like Whirlpool) as primary and high-risk tools for these types of crimes.
The rules, according to Samourai, risked indiscriminately targeting any cybersecurity and privacy technology in the crypto sector, regardless of the actual risk of money laundering:
Rather than target transactions that are “bad for business,” the Mixing Transaction NPRM targets an overly broad range of technical approaches used as best practices both by businesses and individuals for ensuring the security of CVC and impinges on privacy rights of legitimate users of CVC.
Three months later, they were indeed arrested.
Without privacy, there is no freedom
The goal of governments around the world, and particularly in the United States, is no longer to fight Bitcoin, which has now been fully baptized and accepted into global finance with the approval of ETFs. It is no longer a threat to the financial and banking system but rather a lucrative opportunity.
No—the primary goal is to forcefully counter the development of technologies that can liberate the masses from neo-feudal serfdom, targeting individual developers. The process began with the developers of Tornado Cash, now with those of Samourai Wallet… and tomorrow, who knows.
The second goal is to demoralize people. If today you feel downhearted and scared about what is happening, know that you are not alone and that it is part of the plan.
Privacy technologies will always exist; software is pure information, and pure information cannot be stopped, especially if open-source. But it is evident that targeting those who develop these technologies contributes to creating a climate of fear and uncertainty, making it increasingly complex and uncertain for ordinary people with a life, a family, and little desire to sacrifice themselves for the cause.
Thus, many will be forced to capitulate, giving in to the System.
To avoid this, I believe it is important not to forget the human side of all this, to build community and find ways to overcome adversity... even just by talking about it.
I recall that this was exactly how the first Cypherpunks managed to avoid the first attempts at mass surveillance in the 1990s. They did not hide in their rooms but created a community of people ready to debate publicly and openly show the absurdity of what the U.S. government wanted to do (if you don't know what I'm talking about, it's the first Crypto War).