How Whirlpool Smoothed Bitcoin's Traceability

This week, guest host Zach Weissmueller is joined by Keonne Rodriguez, the founder of Samourai Wallet, a noncustodial bitcoin privacy tool. Rodriguez is currently facing a five-year federal prison sentence for conspiracy to operate an unlicensed money transmitting business, while Samourai's former chief technology officer, William Hill, faces four years. The conversation was recorded just 48 hours before Rodriguez was scheduled to report to prison.

Rodriguez explains why he created Samourai Wallet, tracing its origins to bitcoin's cypherpunk roots and his belief that digital cash should offer the same basic privacy as physical cash. He walks through how Samourai worked, and why it never took custody of user funds.

In the interview, Rodriguez addresses the government's allegations that Samourai facilitated hundreds of millions of dollars in criminal activity, the role of blockchain surveillance firms in shaping those claims, and why he believes prosecutors ignored clear regulatory guidance from the Treasury Department's Financial Crimes Enforcement Network (FinCEN). Rodriguez also explains why he ultimately chose to plead guilty despite believing he broke no law, citing the realities of federal prosecution, judicial reassignment, and what he describes as a stacked legal process.

We examine the broader implications of the case for privacy, free expression, and innovation, including parallels to encrypted messaging, past crackdowns on online marketplaces, and the growing tendency of governments to treat privacy itself as inherently suspicious. Rodriguez also reflects on President Donald Trump's recent comments indicating he would look into the case, the possibility of a pardon, and what it means to face prison time for building a tool intended to protect individual autonomy in an era of expanding surveillance.

The Reason Interview with Nick Gillespie goes deep with the artists, entrepreneurs, and scholars who are making the world a more libertarian—or at least a more interesting—place by championing "free minds and free markets."

0:00—Introduction

0:39—What is Samourai Wallet?

3:31—Bitcoin and financial privacy

9:51—Money transmission and noncustodial wallets

13:15—Justice Department communication with FinCEN

16:27—Responding to the indictment

22:50—Why Rodriguez pled guilty

29:41—Money laundering accusations

34:59—Was Samourai's advertising evidence of guilt?

43:01—Canadian trucker protests and bitcoin

50:37—Trump comments on Rodriguez's case

55:08—Ross Ulbricht's advice to Rodriguez

• Producer: Paul Alexander
• Audio Mixer: Ian Keyser

The post He's Serving 5 Years in Prison for Bitcoin Privacy Software appeared first on Reason.com.