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New here? I write about compliance for crypto and fintech founders. No jargon, just clarity.
Let's get into it.
Samourai Wallet called itself a privacy tool. The Department of Justice called it an unlicensed money transmitting business.
Both were technically correct. That's the problem.
If you're building anything that touches user funds in crypto, here's how to know which side of the line you're on.
What Happened
Samourai Wallet launched in 2015 as a Bitcoin wallet with a focus on privacy. Its main features (Whirlpool and Ricochet) let users mix their Bitcoin with others to obscure transaction trails.
For nearly a decade, it operated without registering with FinCEN or implementing any AML/KYC protocols. The founders believed they were building software, not running a financial service.
The Department of Justice disagreed.
When federal agents arrested CEO Keonne Rodriguez and CTO William Lonergan Hill in April 2024, they had processed over $2 billion in transactions. $237 million of that was linked to illicit activity.
Both pleaded guilty in July 2025. Rodriguez was sentenced to 5 years. Hill got 4.
Why It Crossed the Line
The founders believed they were building privacy software. So why did the DOJ call it a money transmitting business?
It comes down to one question: Are you facilitating transmission, or just providing tools?
A self-custody wallet that lets users send their own Bitcoin? That's a tool.
A service that coordinates transactions between users, pools their funds, mixes them through your infrastructure, and charges fees? That's a money transmitter.
Samourai crossed that line in three ways:
Active coordination: Their servers matched users and executed mixing transactions
Fee collection: $4.5 million in fees for transmission-related services
Ongoing control: The founders maintained operational control over how funds moved
"We're just software" doesn't work when you're the one running the servers.
The Regulatory Framework
FinCEN's definition is simpler than most founders expect.
You're a money transmitter if you accept value from one person and transmit it to another. That's it.
There's no carve-out for crypto (yet). No exception for "we're just code." If your infrastructure moves value between parties, you're in scope.
What triggers registration:
Accepting funds (even temporarily)
Transmitting funds on behalf of users
Charging fees for transmission-related services
What doesn't save you:
"We're non-custodial" (if you still facilitate transmission)
"It's decentralized" (if you run the servers)
"Users control their keys" (if you coordinate the transactions)
And remember: this is just federal. Most states require separate money transmitter licenses, each with their own applications, bonds, and ongoing compliance requirements.
5 Questions to Ask Yourself
If you're building in crypto, ask yourself these five questions:
Do I take custody of user funds, even temporarily?
Does my product facilitate the transfer of value between parties?
Do I charge fees for anything related to moving funds?
Do I run infrastructure that coordinates transactions?
Could my product function the same way without me in the middle?
If you answered "yes" to questions 1-4, or "no" to question 5, you should talk to a compliance advisor before launch. Not after.
Compliance isn't about limiting what you can build. It's about knowing where you stand before someone else decides for you.
The founders who build lasting companies figure this out early.
Need clarity on where your product stands?
I help crypto and fintech founders figure this out before it becomes a problem.
- Book a call. DM me on X or LinkedIn
Best,
Anson Zeall, Managing Partner of Azentiq Nexus