DOJ Talks With FinCEN Spark Fight Over Case Against Crypto Mixer

A new disclosure from prosecutors about talks with a key financial regulator before bringing a case against the founders of the Samourai Wallet crypto-mixing service is creating tension between the Justice Department and digital asset industry.

Staffers at the US Treasury Department’s Financial Crimes Enforcement Network told DOJ attorneys that since Samourai didn’t take custody of cryptocurrency, that they believed it didn’t qualify as a money services business required to have a license and anti-money laundering controls, according to the disclosure.

Prosecutors in New York months later brought charges against Keonne Rodriguez and William Lonergan Hill, alleging they participated in ...