Why the Samourai case and WoS’s return to the USA could change the American Bitcoin ecosystem.
On May 17th, Wallet of Satoshi (“WoS“), the wallet software designed to operate on Bitcoin’s Lightning network, announced on its X account its return to the US market with what will be a non-custodial solution “approved” in the United States. Given that it is not known what exactly is meant by “approved,” the news, if confirmed in facts, could have important implications for the Bitcoin ecosystem in the country, especially in terms of privacy, officializing a significant change in the relationship between service providers and regulators. A relationship that in recent years has been marked by deep tensions, especially for those providers that use cryptography to guarantee user privacy and sovereignty and which had reached its peak in April of last year, with the arrest of Samourai Wallet founders for aiding money laundering and operating an unlicensed money transmission business.
In the days immediately following the arrest, an FBI statement urged American citizens not to use services that were not authorized to operate as money transmitters (or money service businesses), in apparent contrast with the guidelines offered by the Financial Crimes Enforcement Network (“FinCEN“) regarding the criteria, indeed not too clear, of §1960 of the American penal code, dedicated precisely to unlicensed money transmission activity. This had raised some legitimate concern for industry operators, for whom regulatory pressure is an ineliminable quota.
The announcement of this return of WoS to the United States comes in a context where the policies promoted by President Donald Trump seem to be able to open a glimmer after the almost persecutory crackdowns endorsed by the Biden administration. Whether this will exhaust itself in political skirmishes or lead to concrete benefits for the ecosystem is still all to be written, but what is certain is that the greatest threat, at this moment, derives today from the risks of a distorted interpretation by the Department of Justice (“DoJ“) of §1960 and from the precedents that could derive from it in the absence of clear regulation. §1960 is, in fact, a powerful and dangerous legal instrument, because after the Patriot Act the requirements for establishing who is subject to licensing are so complicated and confused that the DoJ does pretty much as it pleases and, therefore, is perfectly capable of initiating insidious lawsuits that could create dangerous precedents.
But let’s take a step back. On April 7th of this year, the deputy attorney general in the Trump administration, Todd Blanche, issued a memorandum titled “Ending Regulation by Prosecution,” in which:
- he ordered the immediate dissolution of the unit created by the Biden administration with the purpose of investigating and prosecuting the criminal use of digital assets; and
- declared that the DoJ “is not a digital asset regulator” and that, therefore, exchanges, mixing services and “offline” wallets would no longer have to be prosecuted for “the acts of their end users or for involuntary violations of regulations.”
This memorandum is welcomed with understandable enthusiasm by the sector, which immediately trusts in the possibility of a withdrawal of charges against Samourai developers. However, nothing happens. The memorandum, in fact, says nothing and indeed expressly excludes §1960, which deals with unlicensed money transmission activity and which is at the center of cases like Samourai Wallet.
A month later comes the plot twist, but it is not directly connected to the memorandum. It emerges that the New York prosecutor representing the prosecution in the Samourai Wallet case, aware of these interpretative uncertainties, had asked for a preliminary opinion from FinCEN on the Samourai Wallet case and had been told that, being a non-custodial wallet, the license was not necessary. The discovery is quite important also because it collapses, at least on the substantial level, the framework of the accusation and reinforces the idea that similar proceedings often have primarily a political purpose: well before the persecution of money laundering phenomena, the objective of governments is more often to drain liquidity from instruments that allow individuals to escape, through privacy, the logic of the traditional financial system.
Rodriguez and Hill’s defense has filed a motion to dismiss in the Samourai Wallet case, on the assumption that the requirement of “custody and control” of money is missing, while the prosecution has already argued stating that, in its opinion, the Bank Secrecy Act does not require custody or control of funds. Net of the possibility of appeal, it is clear that if the Judge were to accept the prosecution’s thesis, a very dangerous precedent would be created both for open source software developers and more generally for the entire Bitcoin ecosystem in the United States. In particular, the government seems to argue that to have a “money transmitter,” it is sufficient to accept to transmit funds on behalf of the public, regardless of whether you have control over the funds, citing quite embarrassing examples like the USB cable that transmits data without controlling them or the pan that transmits heat without controlling it. But if “transmit” were really meant as simply “facilitate in some way” the transfer of value, then anyone who contributed, even indirectly, to allowing a transaction could be considered a money transmitter, including the manufacturer of a signing device and even a miner or a mining pool, since these add transactions to Bitcoin’s timechain. All these actors could be asked to implement an identity verification system (KYC – Know Your Customer) for each transaction with obviously unsustainable effects.
On June 6, 2025, several cryptocurrency advocacy organizations, including Coin Center and the DeFi Education Fund, filed amicus briefs in support of the motion to dismiss, arguing that the DOJ’s theory could criminalize the development of open-source software and privacy tools. The hearing to discuss the motion to dismiss is scheduled for July 22, 2025. The outcome of this case could have significant implications for open-source software developers and the entire cryptocurrency ecosystem in the United States.
But this affair is also intertwined with the fate of an industry bill: the Genius Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), focused on the regulation of payment stablecoins, i.e., digital tokens pegged to the dollar and intended to be used as a means of payment or settlement. Approved (for now) by the (only) Senate in June 2025, the GENIUS Act does not explicitly mention non-custodial wallets. However, the definition of “digital asset service provider” in the bill text expressly excludes: “[…] distributed ledger protocol; developing, operating, or engaging in the business of developing distributed ledger protocols or self-custodial software interfaces; an immutable and self-custodial software interface; developing, operating, or engaging in the business of validating transactions or operating a distributed ledger; or participating in a liquidity pool or other similar mechanism for the provisioning of liquidity for peer-to-peer transactions.” This exclusion allows arguing in favor of excluding non-custodial wallets (and their developers) from the obligations provided by anti-money laundering (AML) and Bank Secrecy Act (BSA) regulations in the United States. With the further consequence that those who develop or manage non-custodial wallets would not fall among the subjects regulated as digital asset service providers and, by extension, would not be subject to the BSA nor to AML/CFT obligations (such as KYC, SAR filing, recordkeeping).
Obviously this does not mean that non-custodial wallets are “beyond any control,” because there could be indirect obligations (e.g., for exchanges that interact with non-custodial wallets) and in case of illicit use (e.g., to facilitate crimes), authorities could still investigate developers or providers, even if not AML subjects in a technical sense, but the argument is important and, above all, touches on perhaps the most deserving topic of attention for Bitcoin, because this is where the most important game is played for the future of non-custodial wallets, the Lightning Network protocol and, more generally, open source and, therefore, a large part of financial freedom in the digital age.
In this tense scenario full of ambiguities, WoS’s decision to re-enter the American market as a non-custodial wallet reveals itself, therefore, not only as a technical and market choice of undoubted interest, especially considering the characteristics of rare ease of use of the service, but also as a real opportunity to try to preside over and defend a space – as a tool that puts individual freedom at the center – in the face of the acknowledgment that the custodial model is now irremediably attracted into the network of AML/CFT regulations.
Not only that. Even wanting to set aside the ideological aspect for a moment, it is important to highlight that if compliance is already a challenge in on-chain transactions, the development of layer 2 solutions, such as Lightning Network, presents new complexities and inevitable future tensions with regulators. The golden rule placed to safeguard AML/CFT is, in fact, the Travel Rule, that is, that rule introduced for the first time in 2019, which requires VASPs (understood as digital asset service providers) that imposes that certain information travels with transactions between financ