Latest / What Bitcoin Did / 5 Years In Prison For Building A Bitcoin Wallet | Lauren Rodriguez

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5 Years In Prison For Building A Bitcoin Wallet | Lauren Rodriguez · What Bitcoin Did

0:00
Our home was at five in the morning raided by the FBI.
0:07
And there's laser sights on our chests and we're handcuffed and separated.
0:12
These are the prosecutors who brought charges asked,
0:15
do you think, FinCEN, that Samurai Wallet is a money service business?
0:18
And they had said emphatically, no, they're not because they don't take custody.
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They will lie, cheat, you know, do whatever it takes.
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So they don't want the truth.
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They're out to win.
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They're not out for truth.
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They're not out for justice. They're out to win.
0:30
This case doesn't just affect us.
0:33
It has broader implications for not only Bitcoin, but kind of developers as a whole.
0:39
You know, this did stifle innovation.
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This goes against Trump's executive orders.
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This goes against the deputy AG's memo that they put out, violates on some constitutional grounds.
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The war on crypto is not over.
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And at any point, this could resurface.
0:59
Lauren. Hi, Danny. Good to see you. Thank you for coming to Denver for this.
1:04
Thank you for having me on. There's some shows that you just know are really important shows to
1:10
make, and this is definitely one of them. But you've obviously not been on the show before.
1:15
Do you want to start off by just introducing yourself? Sure. My name is Lauren Rodriguez,
1:19
and I'm the wife of Keone Rodriguez, who is currently serving a five-year federal prison
1:25
sentence for developing a Bitcoin wallet called Samurai Wallet.
1:32
So I have covered this case a little bit before Bill and Keone actually went to jail.
1:38
I had Bill's lawyer on the show with Zach Shapiro from BPI. But for anyone who maybe
1:41
hasn't listened to that show, doesn't know what Samurai Wallet was, do you want to start by
1:45
explaining?
1:46
Sure. So Samurai Wallet, as you said, was founded by Keone, my husband, and his partner and
1:53
co-defendant, Bill William Hill, in 2015. And they started Samurai because at that time,
2:02
there was definitely a maybe ethos transition within the Bitcoin space.
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It was towards the end, you know, dark wallet had kind of paused development.
2:17
there was a real focus towards making Bitcoin that your grandma can use. And that just did not
2:25
interest them. They were interested in the censorship resistant promises of Bitcoin.
2:32
They're cypherpunks.
2:32
Yeah. And so they started Samurai for themselves primarily. Said, you know,
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we're going to build a wallet for ourselves and everyone else is along for the ride.
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And what that meant is they definitely had a strong focus on privacy features within the wallet. It was a full Betch32 wallet, but they had added features such as integrated Tor, Paynems, let's see, Cahoots.
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there was a lot of them, Stonewall, Stonewall 2X, a lot of interesting features like type change
3:12
outputs and various things. And then there were two features that is what the government took issue
3:18
with, which were ricochet, which added extra hops to transactions all within a user's wallet,
3:26
but to separate where the funds came from to where they were going. And then Whirlpool,
3:33
which was their CoinJoin implementation. So they operated Samurai for almost 10 years,
3:40
no problems on Google Play Store, had a lot of users, a lot of core support, and
3:50
never had any interaction, never any requests for information from law enforcement in any sense.
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They even helped fund a letter in response to a proposed legislation from FinCEN, along with 25 other companies that signed this.
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So they were out there operating the business.
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And then on April 24th of 2024, our home was at five in the morning raided by the FBI and the IRS.
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And at the same time, Bill in Portugal, there was a coordinated raid on him and his wife's house.
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Again, first interaction with law enforcement.
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We never received a notice of investigation or a letter saying, don't destroy anything.
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This was our first encounter.
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with was a light rising up to our window at five in the morning and our dog barking and, you know,
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us waking up and realizing there's people surrounding our house and, you know, here,
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come out with your hands raised and the action of, you know, trying to throw on slippers and a robe
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and because it was cold and going downstairs and Keone's just in shorts and I'm trying to leash
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our dog because, you know, as the meme goes, ATF agents or government agents like to shoot dogs.
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So that was a big concern of mine. And we go outside and there's laser sights on our chest
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and we're handcuffed and separated. And I watch, you know, 40 armed tactical gear, night vision,
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you know, nods. Well, first they flew a drone into the house and then continue to clear our
5:41
house, about 40 agents. And this is a small two-bedroom cottage. And I'm standing in the street,
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you know, handcuffed, watching it happen and not understanding what was going on.
5:52
So what happened next that morning? So you were both handcuffed. You were outside.
5:59
Presumably, Keone was taken away. Were you?
6:03
So he was kept, he was placed in a car and I was stood outside. And eventually,
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they brought me back into my house and sat me on my kitchen table.
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Did they tell you what was happening?
6:12
No. And that's, I had asked, I'd asked the, I guess maybe, you know, watch too many television shows, but had asked the officer who was a local officer, you know, holding me like, well, what's this about?
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What, you know, do I get to see a warrant? And he informed me that, no, it's not like the shows where they hold up a warrant.
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I assumed you needed a warrant to do that.
6:32
Well, they had a warrant, but they just don't have to present it to you.
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Okay.
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So they led me back in and they told me they had a warrant and that they politely told me that I need to clear out.
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That I could say if I wanted to, but they wanted me out of the house.
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And so I left.
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Because they were going to search the house pretty quickly.
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Yes.
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Yeah.
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They had called in other agents to search.
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And so thankfully my parents live close by.
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So I took the dog and they took Keone away at this point.
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And so I frantically was trying to call Samurai's attorney because it's the only attorney's number that I knew.
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Hadn't realized that he had moved from the East Coast time zone to the West Coast.
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So it was about 2 or 3 in the morning for him and woke him up.
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And it was stressful, but just trying to figure out what do you do in this situation was my first interaction with it.
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And thankfully, he was able to then call some criminal defense attorneys and kind of get the lay of the land and what happens.
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And then later that day, Keone was arraigned in Pittsburgh, where we live.
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And at that point, he had met with a public defender within Pittsburgh who showed him the indictment and let him know that these were charges in relation to Samurai Wallet being brought out of the Southern District of New York, where I hadn't really spent any time.
7:58
Business never operated. We never lived, but it's coming out of that district and that the charges were conspiracy to operate a unlicensed money service business and conspiracy to money launder, which was shocking.
8:15
But at the same time, we're like, well, that's not the case.
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We never conspired to money launder and everyone in the industry knows we're non-custodial, so therefore we're not money transmitters.
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They just don't understand how this works.
8:28
We'll explain it.
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And it'll all be okay.
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And I'll be okay.
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So I think that's a really important distinction though,
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is that Samurai was always non-custodial.
8:36
And is it right that Samurai had even gone to FinCEN
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to ask if they needed to register and were told no?
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So no, we never went because the way FinCEN operates
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is you can go and ask, but there had been a lot of,
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FinCEN had put out guidance.
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the FinCEN stands for the Financial Crimes Enforcement Network and their branch regulator
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underneath the Treasury Department. And they're in charge of financial crime and enforcing that.
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And so money licenses falls under their jurisdiction. And it had been the case that a lot of
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companies within the space were applying and then they just were not getting any response from them.
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They had put out guidance in 2013 and 2019, which was really good guidance, especially when other branches of the United States government were not as clear like the SEC, whereas a little more vague.
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Vincen said, you know, if you don't take custody, you are not a money transmitter. And they even had
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a stipulation in there for anonymizing service providers, which Whirlpool would have fallen under,
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that they are also not a money service business. So therefore you don't need a license.
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And as it was common knowledge that they weren't responding to these things, it was,
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we didn't request at that time. However, I think what you're referring to is,
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kind of comes up later in the course of the case, where we found out that the prosecution
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six months prior to indictment had gone to FinCEN, and they asked, these are the prosecutors who
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brought charges, asked, do you think, FinCEN, that samurai wallet is a money service business?
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And they had said emphatically, no, they're not, because they don't take custody.
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13:01
Okay, so this was an entirely legal business operating.
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But when this raid happened, did you still like in your gut know that this was about Samurai?
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And even if you thought maybe you could explain it, that that was the reason?
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Because we also know, even if it was legal,
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that the US government maybe doesn't like privacy-preserving software.
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I think just, I mean, just the time of day and news sources
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that I think part of me was maybe in the response of it too,
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the fact that it was so heavily armed, you know, an MRAP,
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which is like an armored vehicle and the drone.
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Like, I think my idea was, they have the wrong house.
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Like, I think that was my initial thought.
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And then once they arrested Keone, I think it's like, okay,
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I mean, we literally don't do anything else.
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You know, his work was, that's all, pretty much all he did,
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was work on samurai and talk to people about samurai.
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So then that's the point where it's like, okay,
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it has to be related to samurai, but didn't know what.
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Okay.
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And then it wasn't until he had met with the public defender
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and she had a copy of the indictment and a copy of, you know,
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the charges brought against him that that's when we knew what they were
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or why they were coming after us.
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But we really thought, oh, this will go away quickly.
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And so what did happen next?
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So Keone was taken away.
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When did you next hear from him?
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So that same evening, we were able to get an arraignment.
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And because we live in Pennsylvania,
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Western District of Pennsylvania,
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he was first arraigned in Pennsylvania.
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This isn't their case.
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They don't really care.
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They let him out on a, I believe it was $100,000,
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not backed, so just by signature.
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He just had to sign it saying he would show up to his first court appearance in New York
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because that's who had brought the charges.
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And he was able to come home that night.
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Bill, on the other hand, in Portugal, because it was the Southern District of New York
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and he lived in Portugal, he was arrested and held in a Portuguese prison for, I believe,
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three to five months.
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I can't remember the exact amount of time, but a really long time awaiting extradition.
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And he wasn't fighting extradition.
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This is just the slowness of bureaucracies.
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And I believe it wasn't a very nice place to be kept for that long.
15:26
No, no.
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It was, yeah, medieval prison and everything that entails.
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Damn.
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You can imagine.
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And so when Keone got home, how was he?
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This is a while ago now I think I went to the court and picked him up and brought him a change of clothes because he had you know went downstairs barefoot in shorts
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And I was able to get him, like, a t-shirt and some,
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I don't know, flip flops or something.
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But I wasn't sure if he'd need to change for a court.
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So I kind of brought him some clothes and drove him back home.
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And I think we were both in shock still a bit.
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We called an attorney, kind of talked to them a bit,
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just really, you know, what's going on?
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Why is this happening?
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And I think at that time,
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from what I remember, I think we really were,
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did not think it would be over two years later
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and he'd be in prison.
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Like, you know, I think we were hopeful and...
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So when did the sort of reality
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of what the situation is now first kind of set in?
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So, court processes are very slow and take a very long time.
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So, we had to go to New York numerous times for short little procedural, you know, making
16:45
sure that they're handing over discovery and short little hearings.
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We did that quite a bit.
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One of these hearings, the bill's attorney brought up the fact that the discovery in
16:58
this case was 17 terabytes, which is 75% of the Library of Congress and had the really,
17:06
you know, cool picture to just demonstrate how much that if it would have been printed out,
17:10
it would reach the moon and back 22 times. So it's a ton of discovery to go through. And with
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discovery, they don't point to things that they're going to bring up. Yeah. So you really have to go
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through it all. It's a very expensive. Is the idea there that it makes it so expensive that you can't
17:26
I mean, I'm sure that's part of it, right?
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They don't want to make it easy. They're out to win.
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They're not out for truth. They're not out for justice.
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They're out to win. It's a very adversarial nature
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of the justice system. And so that was a lot.
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And then, but we were seeing what was there,
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and there wasn't anything there.
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You know, every, all the evidence that they presented
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presented was things they had said.
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So whether it be on Twitter or private messaging
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or different forums like that, I
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think they pulled a single slide out of a deck
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and misconstrued it.
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And everything was taken out of context,
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purposely misconstrued, maybe non-purposely on some of it.
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But it was, in our view, there wasn't anything there.
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There are some memes that they, I don't know, thought were serious.
18:29
And then there was the blockchain data, which, again, Whirlpool and Ricochet were the two.
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They were the issues.
18:39
Yeah, that they had problems with.
18:40
Ricochet, they didn't really focus on.
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They just said, it's bad.
18:43
We don't like it.
18:44
But Whirlpool, at its height, had $80,000 Bitcoin capacity.
18:52
Mm-hmm.
18:53
They were citing transactions that they claim,
18:58
and we never got to the point where we had our own investigation
19:02
to look into whether these numbers were accurate.
19:04
So we'll just say that they are.
19:07
Quite small numbers by comparison to nothing that would raise a red flag
19:12
as an observer, just watching a casual observer watching Whirlpool,
19:17
because, again, as we all know, Bitcoin's a public ledger,
19:20
and you can watch everything that goes on.
19:22
So they said it was, I think they said under 10% of Oracle pool capacity was connected to criminal proceeds.
19:32
But this is the nature of working on an open source tool in Bitcoin that you don't control.
19:38
You also don't control who uses it and what they use it for.
19:40
Yeah, that's correct.
19:41
And those numbers are in comparison with regulated entities such as banks that have the same criminality.
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And those are under obligation to KYC and AML, their customers, where we and the regulator didn't think that we had those obligations.
19:58
So you had these small court dates in New York.
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Was there a point before this went to full trial that you were like, OK, we could be in trouble here?
20:07
No, at this point, we're still really positive.
20:10
Legal team was pretty confident.
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I mean, you're always, when you're going up against the federal government, they're, you know, Goliath.
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Goliath.
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Yeah, good batting average.
20:19
They have endless resources.
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You don't.
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We didn't.
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So there's always that to contend with.
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But, you know, we felt truth was on our side.
20:30
It came up through discovery.
20:31
Our attorney thought, thankfully, to ask the prosecutors, hey, did you ever have a conversation with Vincent?
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And they said, yeah.
20:40
And that's when that came out.
20:42
And that was a Brady violation.
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So because they should have handed that over and they didn't.
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So we thought, well, that's good.
20:47
The judge isn't going to like this, right?
20:49
It goes against judge's rules.
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So you need to hand over this information by a certain date.
20:55
And so taking long, you know, everything's feeling good.
20:59
And then where we got to, and this is over a year in,
21:07
and we've, you know, assembled a motion to dismiss.
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We've assembled some other motions.
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and Judge Berman, who was our judge at the time, wanted everything. He was going to pile everything
21:21
together. We're going to have one big hearing. This would be our first big hearing. And we would
21:25
go over the Brady violation, have oral arguments on our motion to dismiss. He was going to rule on
21:36
some other minor issues and decide whether he was going to take amicus briefs, some things like that.
21:42
A few days before this hearing, gearing up to go, we're suddenly told that Judge Berman has recused himself. Don't know why. And we have a new judge, Judge Coate. She's going to keep the same date. So go to court and expecting to present and have oral arguments in front of her.
22:04
So was that a red flag when you heard that he'd recused himself?
22:07
Oh, well, a little bit. We're a little kind of surprised. You know, he is, both these judges are in their 80s, but he was still seeing other cases. He wasn't like, he didn't recuse himself from everything. It was just our case, which was a bit odd.
22:24
But first time dealing with the justices, I just go with the flow on that.
22:29
But our attorney's thought was a little bit weird.
22:33
And also the distinction between the two judges is, so Judge Berman is one of the few judges within the Southern District of New York who does not come from a prosecutor's background.
22:45
Judge Coate, our new judge, on the other hand, was the former chief of the criminal division of the Southern District of New York prosecutor's office.
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So the people who wrote the charges against us, she used to be their boss.
22:59
She's a prosecutor's prosecutor.
23:00
So that was a little bit weary.
23:01
We're like, okay, but judges are supposed to be non-biased.
23:04
They're supposed to be fair.
23:06
But did it feel like you were getting a tougher hand when the judge changed?
23:09
A little bit, a little bit, but not so much.
23:12
We're still ready to go.
23:13
You know, we had strong arguments.
23:16
Again, we had two conspiracy charges.
23:19
Both the charges were conspiracy.
23:21
and in a conspiracy charge, the government is supposed to prove that you entered into an
23:30
agreement to break federal law. Well, we knew that wasn't the case. That was never the intent.
23:37
That never happened. So there wouldn't be any, there wasn't any evidence to that.
23:42
And then we also had the Brady violation, which said FinCEN, who is, you know, directed by Congress
23:49
to be the regulator who's in charge of money service business.
23:53
They're saying that you're not a money service business.
23:55
So I felt pretty confident.
23:58
And our motion to dismiss had some really good case law,
24:03
one from the 1940s with prohibition,
24:08
and it was a sugar manufacturer who was selling to bootleggers.
24:12
And that was ruled through the appeals process that no,
24:17
even though he knowingly was selling to bootleggers, he was not part of the conspiracy
24:21
to create and distribute alcohol. And then there was another case in the 90s where a grow light
24:28
operator was advertising in High Times Magazine. And that case as well went to the appellate court
24:36
and they said, no, even if you're advertising, knowing that it could be used for criminality,
24:43
is not enough to be considered a conspiracy.
24:46
So we're feeling pretty confident.
24:48
Seems to fit.
24:48
Yeah.
24:50
And from the outside of someone who was watching this case,
24:53
the Brady violation seemed like a really big deal.
24:54
It was.
24:55
I thought that was going to be sort of the smoking gun
24:57
that meant that Kearney and Bill got off.
24:59
Yeah.
25:00
But obviously that didn't come to play.
25:03
But so when you went to court,
25:07
was the plan to plead not guilty?
25:10
Yeah, we had pled not guilty up to this point.
25:13
And we're going, and this is our first appearance a few days after the judge has changed.
25:18
So she's just gotten the case.
25:19
She's just been given all of the motions that have been submitted to her in writing.
25:24
We're going in thinking we're going to be in court for a few hours.
25:28
There's going to be, you know, these motions can be argued back and forth.
25:32
And, you know, we'll see where they fall, but we're feeling good.
25:36
We go before this judge, and it was maybe a five to 10-minute hearing.
25:40
She gets on the bench, says, good morning, says, I'm denying everything.
25:46
Goodbye.
25:48
And when you have that, when you're not allowed to, she wasn't interested in hearing anything
25:57
more, didn't explain why, which usually they will give either orally or in writing while
26:03
they're denying things.
26:04
It was shocking.
26:05
And that's the point where we realized, okay, the math's changed. This is not the same. And we were advised at that point as well. And something I didn't realize before having this interaction, that the judge really does have such an impact in determining the outcome of a trial.
26:32
Same set of circumstances, same facts,
26:35
and who your judge is can determine whether you're found guilty or not.
26:39
A judge gets to decide what kind of defense you're allowed to put on.
26:44
They get to decide who you're allowed to present as witnesses,
26:49
what kind of evidence you can present to the jury,
26:55
and as well as down to what words you're allowed to use in front of the jury.
26:58
So they really are kings and queens of their courtrooms.
27:01
And what they say is kind of final.
27:03
And so hearing that, and hearing that we wouldn't be able to put on the defense that we had been planning, again, this is over a year into this process.
27:14
That's crazy. They can sort of sway the outcome before anything's even been said in court.
27:18
Yeah.
27:19
I did not realize that's how it worked.
27:20
Yeah. They get to say whether, yeah, I mean, what, they could have two sheets of paper and they say, yeah, you can show this one.
27:27
show this one, but you can't show this one.
27:29
Wow. So, yeah.
27:31
So at that point, this is more serious than maybe we thought.
27:35
Yeah. And it was after that hearing where everything was denied. And it came down to,
27:41
she denied amicus briefs, which for those who don't know are friends of the court letters.
27:48
They're interested parties, but not for the defense or the prosecution, just giving more
27:55
more educational insight into a case,
27:58
because a judge can't be expected to know,
28:00
be an expert in every case that comes before her,
28:02
especially in such a technical one,
28:03
such as one involving Bitcoin.
28:06
What was the stuff that they weren't going to allow you to say?
28:08
Well, we didn't get to that point,
28:11
but we were advised by the attorneys.
28:13
So a legal defense option is defensive counsel.
28:19
We, as in the whole industry,
28:20
had reviewed the guidance of FinCEN.
28:26
And again, it wasn't just our attorney saying this.
28:28
This was industry-wide, reviewed what FinCEN said and said,
28:32
no, if you're non-custodial, you're not a money transmitter.
28:35
And that was really the crux of it.
28:36
Because if you're not a money transmitter, if you don't need to do KYC, IML,
28:40
then how can you be a money launder?
28:44
Because you don't know who's coming through,
28:46
and you're not holding anyone's funds to move.
28:50
Again, whole industry was under this interpretation.
28:54
It wasn't even an interpretation.
28:55
It was pretty black and white, what the guidance said.
28:58
And so that was one of our defense options,
29:03
to present a defensive counsel saying,
29:05
this is what the law says, what we told a lawyer said,
29:09
we thought we were following the laws,
29:11
therefore we can't have conspired to break the law,
29:14
which is pretty accurate.
29:16
They designed it to stay within the bounds of the law
29:19
as we understood it. They said, that's not going to fly with her. She's not going to let you put on
29:24
that defense. And shortly after this hearing that the prosecution came to us. So they don't want the
29:30
truth. No, no, no, it's, you know, prosecutors and maybe, maybe in some cases they do, but a case like
29:41
this, um, the head of the Southern district of New York at the time under Biden had said he
29:49
wanted to be the sheriff of Bitcoin or sheriff of crypto, actually, which was in reference to,
29:57
I think in the 90s, the head of the SDNY was the sheriff of Wall Street. So he was looking to make
30:04
a name. That's why there were, you know, these cases didn't happen, right? Samurai was in operation
30:08
under President Obama, President Trump won, and then Biden. Biden's when it, you know, they came
30:15
brought these charges. Same set of facts, different interpretation. And that's not how the law is
30:21
supposed to work. But there was a lot of crypto cases all brought within the Southern District
30:28
of New York at roughly the same time. With Roman Storm. Roman Storm is another, yeah.
30:34
And these are AUSAs who are looking to make a name for themselves. And that's what was interesting
30:43
with the whole, you know, when we were talking to different law firms, the first thing they
30:49
all said when meeting with them, their pitch to us, for us to be their client, was formerly
30:57
an AUSA at the SDNY.
31:00
Formerly an AUSA.
31:01
They all come from there and then go into private sector, or they turn their prosecution
31:08
job into a political career.
31:11
It's just a stepping stone.
31:12
And what are they after?
31:13
or thereafter wins under the belt.
31:15
And that definitely came to this because if they were after truth then there wouldn have been a need to hide the Brady That Vincent said we weren you know
31:28
there wouldn't be a need to twist things the way they did.
31:32
They were after a win.
31:35
And so that's when they came to us,
31:37
and they said, we're going to make you an offer,
31:42
offer of a plea deal.
31:43
You have 24 hours to decide.
31:45
You both have to agree or the deal's off.
31:48
And what they offered was plead to unlicensed money transmission and will drop conspiracy to money launder.
32:00
And the difference of those two charges is unlicensed money transmission has a max sentence of five years,
32:06
while the conspiracy to money launder has a 20 year.
32:12
So go to trial, you're looking at 25 years.
32:15
And Bill is in his late 60s.
32:20
That's potentially a life sentence.
32:23
Not to mention, they're also threatening that the entirety of the money they said went through Bitcoin or went through Whirlpool or people that use Whirlpool that were criminal proceeds, which they claimed is 248 some million dollars, maybe more.
32:43
that they would put a fine against them.
32:47
So it's life bankruptcy.
32:49
Yeah. Well, it's not even just life bankruptcy.
32:51
It's if you have that over you,
32:53
you're on kind of bail conditions for the rest of your life
32:56
until you pay that off.
32:57
So you're never a free person.
32:59
And when you went home to discuss this,
33:03
did any part of you want to fight it?
33:04
Yeah. Yeah. Keone, I mean, it was a really tough call
33:07
because he didn't conspire.
33:13
to operate an unloaced money service business
33:15
and he didn't conspire to money launder,
33:17
which were the two charges.
33:18
So it was a lot of,
33:23
you know, it did, it weighed really heavily,
33:26
but it came down to there's no way
33:29
we're gonna get a fair trial
33:31
with the judge operating as a fifth prosecutor from the bench.
33:35
You know, you're fighting with both hands tied behind your back
33:37
and, you know, what do you do?
33:40
So if we would take it to trial, and prosecutions have a 90-plus percent conviction rate for a reason.
33:50
If you take it to trial and lose, which the fact that we're not going to be able to present anything, yeah, is the likely outcome.
34:00
If you would appeal it, a lot of times you're appealing it, not all the time, but depending on the judge, you might have to appeal from prison.
34:08
And there's people in prison with Keone right now that are appealing their sentences, and they can take years.
34:17
So, you know, the decision was made that we're going to take the deal.
34:23
And were your lawyers saying that was the best outcome here?
34:26
Yeah, they were.
34:27
And that's the thing, too.
34:29
It was hard and still hard.
34:31
But when you have two law firms that are leaving a lot of money on the table, and they're both advising the same thing.
34:40
I didn't realize this, but to fight a technical case within the Southern District of New York through trial, to go to trial, is about $13 million per defendant.
34:52
We don't have that kind of money.
34:53
We still don't.
34:54
BPI was great, and they were able to raise about a million dollars that was divided between the two things.
35:02
But we're a million dollars in debt at this point.
35:04
Yeah, there's no—so there wasn't any money to fight it.
35:09
You know, with her as a judge, we weren't going to be able to present our defense as we wanted.
35:17
And, you know, the downside is a big downside.
35:20
So it was, you know, ultimately came to the decision.
35:25
And when you do change your plea, you have to give something called an allocution statement.
35:32
And it's pretty much just in your own words stating how you broke the law as it's been charged.
35:40
And that took a lot of back and forth too because Keone would not lie.
35:44
He's like, I'm not going to lie in this.
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37:49
Is that one of those really tricky situations
37:51
where you're trying to please the judge
37:54
and kind of let them think that you're confessing to your sins
37:58
and accepting responsibility when really,
38:00
you want to just tell your truth of what actually happened?
38:03
It's actually more so, so the allocution
38:05
had to go back and forth between the defense attorneys
38:08
and the prosecution attorneys.
38:10
OK.
38:11
First, before it was presented to her.
38:13
So they actually got a say in what he said.
38:16
And it finally came down to what his statement, and I'm paraphrasing, but basically was, you
38:21
know, I founded, coded, and maintained Samurai Wallet, which allowed users to transact their
38:32
Bitcoin and knowing that some of those users could be some of the proceeds from those users
38:40
could have been from crime, which is completely true.
38:45
I think anyone that's a developer or that builds anything, whether it be a gun, hammer.
38:51
It could be used for that.
38:52
It could be used for good.
38:53
Yeah.
38:54
That people could possibly use.
38:56
Yeah.
38:57
Didn't know of any specifics, but that was enough.
39:00
That was enough and they accepted that.
39:02
So how was that last night before you went to court, knowing that potentially you weren't going to see him again in the same capacity for five years?
39:10
Well, part of what we.
39:15
So once you once you change your plea and then you go away for a bit and there's like this whole pre sentencing report, a couple of months, everything, everything is really slow.
39:25
And they do a pre sentencing report and some interviews and then you go back for sentencing.
39:30
So it was after the change of plea, it was hard, but once it was done, it's kind of like you can't go back.
39:43
So there was a lot of anxiety until that point.
39:46
Are we doing the right thing?
39:47
And then we can't go back.
39:49
We've done it.
39:50
It's done.
39:51
So it was just moving forward and focusing on sentencing.
39:54
And so we went to the sentencing.
39:56
And that's really when we realized, yeah, this was the right call.
40:00
because this judge threw the max of everything at him.
40:06
And if she could have given him life, she would have.
40:09
But there's legal maximums, and she meant all of those.
40:13
And that was the point when Keone said, like, yeah, this was the right call.
40:18
Like, we definitely made the right decision.
40:22
At that point, part of what was agreed with the prosecution
40:25
was that he would be able to self-surrender.
40:26
because, again, there's a waiting time between sentencing and when the prison, federal prison,
40:32
will be ready for you. A lot of paperwork has to go through. If you are not self-surrendering,
40:40
then you may be remanded to a jail. And in New York, that's, I think it's a jail in Brooklyn,
40:49
which was obviously not close to where we live. So that's part of what he agreed,
40:53
that he wanted to self-surrender.
40:55
The judge was ready to take him into custody right then.
40:58
She had marshals in the back of the room of the court hearing.
41:04
So that was her intent, but it would have looked bad
41:08
if she would have gotten up and remanded him,
41:09
even though the prosecution had agreed to let him self-surrender.
41:13
And he had been out on bail, again, for over a year.
41:16
Yeah.
41:16
So there wasn't a flight risk.
41:19
So she agreed, but that was definitely a close call.
41:23
She would have, had it not been agreed and said openly in court,
41:27
she would have definitely taken him there.
41:29
And I didn't realize that was until I saw the marshals that...
41:32
But how weird, like, your life must have felt so strange
41:36
in that interim period between getting the sentence
41:38
and before he self-surrendered, like, what did you even do?
41:42
Cry. Cry a lot. I mean, really.
41:47
Yeah, it was hard because it's...
41:49
He was very focused on a couple of things.
41:52
One, making sure that you're married, you have, there's just certain things that you take care of versus your wife takes care of.
42:00
And so he kind of wrote me this huge guide of what happens if the internet goes out, like how to fix that.
42:07
I don't know how to fix that, but now I do.
42:10
Where to get toner for the printer.
42:12
So, I mean, that was a very practical thing, which I appreciate.
42:17
But then also he was finally like free to tell his side because of this whole up until this point, everything that was coming out was from the prosecution.
42:29
So I think that in a sense was a relief that he was finally had his voice back for a brief time.
42:37
And so, you know, that was nice.
42:40
But then it also took him away a little bit because he was doing as many speaking engagements as he could just to get the word out of this is how it actually is.
42:51
But yeah, it was hard.
42:53
And she said he needed to self-surrender on December 19th.
42:57
So just before Christmas, actually just before one of my brother's weddings was on the 20th.
43:02
So, I mean, yeah, just kind of, there was no reason that it couldn't have been after Christmas. It was pretty spiteful, I think.
43:13
Yeah, for sure. And how did he feel? Because I know if I was in his shoes, I'd be terrified.
43:18
Like the idea of what you see on TV and in the movies about going to prison, terrifying ordeal, how was he?
43:25
um he's pretty pragmatic so he read a lot of books of people or blogs of people who have been
43:32
in we knew where he was going so where sorry where is he he's at morgantown federal corrections camp
43:39
or federal prison camp i should say i should say um so he kind of so knowing that able to do some
43:48
research, able to kind of get an understanding of how it functions, you know, the more information
43:54
kind of better prepared. I don't think you can ever be fully prepared. Uh, but I think that
43:59
helped and gave him something to do, something to focus on. Um, again, he's just the kind of
44:06
person that's like, this is, yeah, I mean, really. And, you know, just trying to, trying to comfort
44:12
me and, you know, I was trying not to be too big of a mess. And, um, and is that, how far is that
44:17
from you. Can you easily go and visit him? Thankfully, yeah. It's about an hour and a half
44:21
from me. Do you get any say in that, where he goes?
44:24
So, the way it works, he requested that because it's the closest to our house. And it's all based
44:31
on what level of prison you're at. It is based on a variety of factors, whether it's violent crime
44:37
or not, whether it's your first offense or not, how many years the sentence is. So, like, all these
44:41
play into it. And so, he was going to be at a federal prison camp, and they've been shutting
44:45
a lot of prison camps down. So the fact that there was one that close was really lucky for us.
44:55
They have to play, or they try to place you. They don't have to. They try to place you within 500
45:02
miles of family. That's a pretty big distance. So yeah, an hour and a half drive isn't so bad.
45:08
And there's a lot of guys that are in there with them that families have to fly in because they
45:13
live so far away. So the fact that I can go down and I'm able to go and see him at least once a
45:19
week is, you know, and if there's a federal holiday, I can go on federal holidays. So that's
45:23
definitely been a blessing. And what kind of reputation does that jail have or that prison
45:27
have? It's because it's a prison camp. So there's no fences or walls. It's actually used to be,
45:36
it's a beautiful setting, like rolling hills. And there's a lot of like geese and ducks and deer.
45:42
So it's kind of, you know, this juxtaposition between all these prisoners and that it's not violent, which is, you know, right.
45:53
That's what I'm, I think, most thankful for is that like he's safe, but it's still prison.
45:59
And it's still, especially for someone who, you know, as I think a lot of Bitcoiners are so invested in freedom to have that stripped away and, you know, told this is, and it's like silly little things that, you know, they'll call it the Bureau of Prisons.
46:16
they, they nickname it, you know, they say it's backwards on, on purpose. Cause like just things
46:21
that you think in any other section of society would be so easy to have operate in a certain way,
46:30
logical way, and it'll be the complete opposite there. Um, so that's frustrating, but you know,
46:37
he's got to kind of just one day at a time and do it and read a lot and kind of try to distract
46:43
himself, but it's, it's boring.
46:45
It's very boring, especially for someone who, you know, was so active and, and
46:52
thinking and learning and yeah, developing.
46:54
How has he been?
46:55
Like, how was the first time you went to see him?
46:57
Uh the first time was a big relief for me Cause I didn know you know I dropped him off but I did I couldn even get close to it so when I was first able to to go down and see him that which
47:09
was I think it was Christmas day it was the first day I drove down to see him um was a huge relief
47:15
you know he was okay um he had eaten like just like normal concerns that I just didn't know what
47:22
to expect yeah so now we've definitely gone into a routine like that that took a while to
47:28
right you have your partner who's we've been together for a long time and you're used to
47:33
waking up next to them or you know fixing coffee and just normal daily life and then that person's
47:39
gone you definitely notice it so as we've progressed and it's it's been over three months
47:45
now like kind of right getting used to things yeah it's crazy though because like you obviously
47:49
always will think of him in that situation but it completely throws your life upside down as well
47:54
How have you managed it?
47:56
Yeah, it's definitely being able to focus on, right,
48:00
continuing to try to be his voice out here.
48:03
Yeah.
48:03
Because, yeah, he's been writing articles,
48:07
but it's not the same.
48:09
And, you know, I think it's important
48:10
because this case doesn't just affect us.
48:13
It has broader implications for, you know,
48:16
not only Bitcoin, but kind of developers as a whole and further.
48:21
so that's really been kind of something to keep me occupied and focused on and yeah you know i just
48:29
get by we kind of gotten our like i said our routine down with you know i know to expect us
48:35
call between six and six thirty in the morning and you know we talk for this amount of time and
48:40
then we email throughout the day like just little things like that but but those are always weird
48:44
too because you're like aware that there's a third person yeah you know listening in and oh
48:49
Or are they literally live monitoring every call you do?
48:51
I don't know how.
48:52
I mean, they could be.
48:53
You have to assume that.
48:54
Yes.
48:54
Yeah.
48:55
And it's not like we have anything bad to say.
48:58
It's still weird.
48:59
Yeah.
48:59
Yeah.
49:00
It's weird to, you know, you want to have a private conversation.
49:03
And it's just, that's just not how it is.
49:05
And you have to accept that.
49:06
And yeah.
49:07
So because he pled guilty in the end, obviously sentenced to five years, which started just
49:13
before Christmas, the pleading guilty means there's no appeal process, right?
49:18
Yeah.
49:19
Okay. So really your options are that he's either going to serve five years or you can try and get him a pardon.
49:26
Yeah.
49:27
So what's happening with that now?
49:29
So the pardon route is, you know, and I think we have good cause.
49:36
This goes against, you know, Trump's executive orders.
49:39
This goes against the deputy AG's memo that they put out.
49:43
This goes against the regulation that was there.
49:46
It violates on some constitutional grounds of the fact that they brought the charges to begin with, because there's rules within the Constitution that if a law is ambiguous, that it should always be cited on the defendant's side.
50:01
And if you can't change a law and then just go and arrest people or change the interpretation of a law and go and arrest people, which is exactly what happened here.
50:10
So there's a lot of grounds for President Trump to be able to grant a pardon and be doing the right thing, the just thing.
50:21
but you know it's uh the pardon process is president trump's very busy and it has to get
50:27
in front of him and that's why keeping this you know keone and bill's name out there and keeping
50:32
the story um on people's minds is is important because they're not going to want to you know to
50:40
get the attention of the president it needs to have wider attention in people's minds and be
50:47
something they care about. Totally. And it is obviously very in line with what you'd expect
50:52
Trump to do, like with Russ Ulbrich and I think CZ got a pardon. But I could be totally wrong here,
50:58
but the way you hear about pardons generally is it'll be like at the very start of a presidential
51:02
campaign or the very end. Like, do they still happen all the way throughout their term?
51:06
They do. There was last month, he did a round of pardons that, and sometimes they go in themes,
51:12
which is, I don't know why, but they do.
51:14
And it was former NFL players.
51:17
Much of them got a pardon.
51:18
So they do happen throughout.
51:21
There are, like you said, kind of larger chunks of,
51:25
there might be thousands of people pardoned, you know.
51:27
And obviously with the January 6th political prisoners,
51:30
that was a huge one at the beginning.
51:33
But there have been some throughout.
51:36
It's just not the numbers.
51:38
But you're really at the whim of him,
51:40
whenever he feels like it, I guess.
51:42
Yeah, and I don't even know if it's so much the president as it is, you know, he has a lot of people advising him that someone has to carry it over to his desk at some point.
51:52
And when they decide to do that, I don't know how that works.
51:57
It's all about picking the opportune moment.
51:58
Yes.
51:58
But the crazy thing here is like there's huge implications for Bitcoin.
52:02
Like we want this to happen because that then,
52:05
I don't know if it's maybe not set a legal precedent,
52:07
but it does set some kind of precedent that like you can work on free
52:10
and open source software that is like in the benefit of Bitcoin.
52:13
You're not breaking the law.
52:14
Like it seems obvious that there should be a pardon here,
52:17
but what can we do to like amplify that message?
52:19
What do you need Bitcoiners to do?
52:21
So we do have a change.org petition to sign in support of a pardon.
52:28
Do they work?
52:28
So Ross Albrecht did say that that was instrumental in, because he's had over 100,000 signatures, that that was instrumental in him being able to be granted a pardon by President Trump.
52:42
Because they saw that this, again, people care about this topic and they care about this injustice of, in his case, a double life, over a double life sentence.
52:51
How many signatures do you have so far?
52:53
Just over 15,000.
52:55
We need to pump those numbers.
52:56
Yes.
52:57
Well, I'll make sure that's included.
52:58
everyone go and sign that petition. And so the petition is one thing, but I'm sure this legal
53:05
case cost you an absolute fortune. Can people still donate to this? I know BPI had their fund
53:11
set up where you could go and donate Bitcoin. Is that still there? So BPI's fund was for the
53:16
defense costs. They've since closed that, but we do have a lot of legal debt. And so if people do
53:25
want to be so generous to help us and kind of say, again, another way to say this is wrong and
53:32
we support it. There is a website, billandkeone.org. And through there, there's a link to the petition
53:37
they can sign. And then there's also links to Gifts on Go as well as Bitcoin donations.
53:42
Okay. Well, I'm going to try and send as many people to those links as possible.
53:46
What does this mean for Bill? Because obviously you're fighting for Keone's pardon. Is he also
53:51
trying to get pardoned? Yeah. As much as I'm mentioning Keone a lot because he is my husband,
53:58
everything we're doing, the fundraising, the petition, as well as the pardon application,
54:03
has all been together. They started Samurai together. They're co-founders, co-defendants,
54:09
and hopefully co-pardonies. But yeah, everything's been in lockstep with them throughout this
54:16
process. He's just, and this is how it was, you know, Keone was the kind of the spokesperson did
54:22
the speaking on behalf of Samurai and that's just not what Bill's interests are, so.
54:28
Fair. But we need to get them both pardoned. How hopeful are you? Do you think there's a good
54:33
chance this happens? I do. I do. Again, it's, you know, so the Southern District of New York is the
54:41
same federal prosecutors that went after President Trump. So he knows. He doesn't like him. He doesn't
54:47
like them because he knows, he knows, he has an insight where I didn't before this, and I don't
54:54
think a lot of the American population has to the fact that they will lie, cheat, you know, do whatever
55:01
it takes to win, that they're not after truth, they're not after justice. So the fact that he's
55:05
a president who has been through this process, who has had lawfare perpetrated against him,
55:09
and can see it,
55:13
he's also then someone
55:16
who is able to fix the injustice.
55:20
And I think he likes to do that.
55:21
I think, you know,
55:23
given if the case was sat in front of him
55:25
and he was able to, you know,
55:28
if he watches this podcast, hi,
55:31
then he would get it.
55:32
If he saw the facts, he'd be on your side.
55:34
Yeah.
55:34
Yeah.
55:35
I think so too.
55:37
Can I ask you an awkward question?
55:38
Sure.
55:39
Obviously, one of the things that was, I believe, going to be brought up in court, one of the things that maybe played against Bill and Keone's defense was some of the tweets that they'd written, which were kind of out there.
55:52
I think you can definitely argue that they're joking and it's like tongue in cheek.
55:56
But was that a big, was that like an instrumental part of the prosecutor?
56:01
That was definitely, I mean, that was their whole case was, look at these things these guys said.
56:06
And a lot of them, right, there's one, the Russian oligarch one, they like to point out that I said, welcome Russian oligarch users.
56:14
And anyone that, you know, the X handles of Samurai Wallet is still up there. You can go and search.
56:20
And if you see welcome new, you know, blank users, you pull up a lot of them. This is a meme template that they used.
56:28
And right, they got into, so when we kind of all got into Bitcoin, Bitcoin was this magical internet money.
56:33
and there was a lot of people like fun yeah using like unicorns and so it was still kind of that
56:37
mentality and i know it's like it's changed a lot it's a lot more serious and you know a lot more
56:42
money at stake and yeah everything but that was kind of the ethos still behind it and they didn't
56:48
have a you know they didn't have a marketing budget they didn't have this you know relatively
56:52
small team and um so right these kind of catchy meme expost tweets whatever you want to call them
57:01
were it. And there was, I mean, there was one welcome new Fed users, welcome new Kuwaiti. Like
57:07
it was just, it was a template, a meme template that they used. And some of the other things that
57:12
they pointed to, that was the big one that really, like, because I think Russia was the bad guy with
57:17
the whole Ukraine war. But they mentioned something about, there was a slide deck that
57:25
they had posted that, again, they made a big deal out of, and this is a 40 some page invest,
57:30
you know, trying to get investors, probably the first slide, one of the first slide decks they made.
57:34
And on the far column, it said something about, um, illicit something, I forget the actual
57:42
terminology. But if you would flip through a couple of slides before and a couple of slides
57:48
after, it was animated where there was a little samurai icon logo saying, these are the things we
57:54
want to be in and there was arrows pointing to um we want to be we don't want to be in the on-ramp
58:01
the fiat to bitcoin not interested in that we want to be in this little space of wallet
58:09
and you know transactional at no point did it did it point to the illicit or anything like that i mean
58:15
this point to the poker didn't point to like there's a lot of things on that list but again
58:19
It's just their way of cherry picking things to say something
58:23
that the original document didn't say at all.
58:25
Yeah, I mean, it's one of the tricky things where, like,
58:27
the reason that this is an amazing tool for human rights activists,
58:30
dissidents, just normal people who want to protect their privacy,
58:32
is the same reason that people who are doing illicit things
58:34
might want to use it. And it's like, you can't have one without the other.
58:37
And I don't think those tweets are at all soliciting Russian oligarchs
58:41
to come and use it. It's a joke.
58:44
It's crazy that that's what the prosecution was based off.
58:47
I mean, the facts were always on your side. Hopefully, I've got everything crossed for you that you do manage to get Q&A and bill pardoned. What's next for you? What do you have to do? What are the steps between here and there?
59:01
So, I mean, from my understanding, I don't fully know if I would find out with everyone else if he got a pardon. I'm not sure how that process works.
59:13
If you get a heads up or not.
59:14
Yeah, there's not too many people that have, I guess, been through this process. But that really is, you know, continuing to raise awareness to the point where I do get that call to go pick him up from prison. That's the end goal.
59:28
And that's what's next. But further than that, I think it's important for people to realize that
59:36
one, this did stifle innovation, privacy innovation on Bitcoin and innovation in the
59:42
space in general. And that's all still needed. I think, I don't know, we get this weird separation
59:49
that people forget that the Bitcoin blockchain is exposing your bank or your credit card statements
59:56
online for the world to see, good, bad, everywhere in between. And so I hope that if there is a
1:00:05
pardon, that there's some taken seriously, the privacy within the Bitcoin space. And then also,
1:00:14
kind of in a larger scale, that the war on crypto is not over and that people keep-
1:00:21
You don't think it's over?
1:00:23
No.
1:00:24
So have you, because I'm sure you're watching this closely, do you think there has been
1:00:28
any change under Trump, or do you think this is still alive and developers are still at
1:00:31
risk?
1:00:32
So there's definitely been a pause because, thankfully, President Trump is friendly to
1:00:38
this space.
1:00:39
But the people who are starting these investigations, who are bringing the charges, are not the
1:00:47
AG or Deputy AG, these appointed positions.
1:00:50
They are the line prosecutors and the FBI investigators.
1:00:56
These are kind of the lower level people and they still have an ideological lean and they
1:01:02
don't like Bitcoin.
1:01:05
They don't like, you know, that's just so at any point, this could resurface.
1:01:11
And I was saying earlier that I do hope clarity gets passed.
1:01:16
I think there's a lot of protections in there.
1:01:19
Yeah.
1:01:19
But it doesn't necessarily stop a prosecutor from bringing charges like they did here, right? In this case, it was unprecedented, novel theories, taking established, you know, what a whole industry was built on as guidelines, regulations, and turning it on its head.
1:01:41
Yep.
1:01:41
And that can still be done.
1:01:42
I mean, and we saw the chilling effect from that. Like companies left America straight after that, stopped offering services in America. And like, I know a lot of them have come back, but it's not to say that can't happen again.
1:01:52
Well, I hope the next time we do this show is with you and Kione.
1:01:56
Yes.
1:01:56
That would be awesome.
1:01:57
I'll just let him do it. He's much better.
1:02:00
But like, if there's anywhere else you want to send anyone, let them know. If not, I'm going to put those links in the show. Everyone go and sign the petition. If you've got some money that you want to donate, do it.
1:02:10
I really wish you the best of luck. I hope that we are sat here in a few months time doing this
1:02:15
with you and Q&A. Thank you so much for having me on. No, thank you for coming on. It's amazing.
1:02:20
This is the most serious I've been in an interview in a long time.
1:02:23
But thank you so much, Lauren. And I really do wish you all the luck in the world. Thank you.
1:02:40
Thank you.