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Crypto Mixing Services Defended Amidst Arrests: Privacy Advocates Speak Out

Ki Young Ju, founder and CEO of CryptoQuant, defended crypto mixing services, stating that they are not inherently criminal.

In response to the recent arrest of Samourai Wallet founders, he emphasized the importance of privacy in Bitcoin, noting that mixing, a technique used to enhance privacy, should not be deemed illegal. He likened punishing mixing service providers to blaming the inventor of a knife for its misuse.

The United States Department of Justice (DOJ) arrested Keonne Rodriguez and William Hill, CEO and CTO of Samourai Wallet respectively, on April 24.

They each face charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business.

This development sparked concerns within the crypto community, with fears that it could signify increased governmental scrutiny of the industry.

NSA whistleblower Edward Snowden criticized the arrests, describing them as an assault on financial privacy.

He advocated for making financial transactions private by default to prevent such governmental interventions.

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The DOJ alleged that Samourai Wallet facilitated unlawful transactions exceeding $2 billion and facilitated over $100 million in money laundering transactions from illicit dark web markets.

Crypto analyst Ryan Adams echoed concerns about the erosion of financial privacy, emphasizing that developers now face significant legal consequences for their coding activities.

This arrest is not an isolated incident; it reflects a broader trend of crackdowns on privacy-preserving technologies within the cryptocurrency space.

In August 2023, the DOJ charged developers of Tornado Cash, a crypto mixer, with money laundering and operating an unlicensed money transfer business.

This followed the arrest of three developers, including Alexey Pertsev, in August 2022, shortly after the U.S. Treasury sanctioned Tornado Cash for its alleged use by the North Korean Lazarus Group in laundering over a billion dollars worth of cryptocurrency.


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