The U.S. government shut down Samourai Wallet, a Bitcoin mixing service, in 2024, arresting its developers for allegedly operating an unlicensed money transmitter. Crypto advocacy groups, including the Blockchain Association and Coin Center, filed amicus briefs arguing the case should be dismissed, as the developers merely provided software without controlling user funds—a stance supported by FinCEN’s 2019 guidance. The groups warn that prosecuting non-custodial tools could set a dangerous precedent for privacy and innovation in crypto. Meanwhile, the legal battle echoes past actions against Tornado Cash, another mixer accused of facilitating money laundering.
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OFAC Sanctions Funnull in $200M Crypto Scam Linked to Triad Nexus
The US Department of the Treasury’s OFAC has imposed sanctions on Philippines-based Funnull Technology Inc. and its administrator, Liu Lizhi, for running a $200M ‘pig butchering’ scam targeting American investors. OFAC blacklisted two of Funnull’s crypto addresses, while the FBI issued an advisory detailing technical indicators linked to the fraud. Investigations by Chainalysis and Elliptic revealed Funnull’s role in Triad Nexus—a network hosting 200,000+ scam-related hostnames—and its connections to Huione Pay, a FinCEN-flagged money laundering hub. The addresses received over $4M in illicit funds, underscoring the scale of the operation.
read moreCetus Offers $5M Bounty for Hacker Amid Sui Centralization Debate
Cetus Protocol is offering a $5 million reward for information that identifies and leads to the arrest of the attacker who exploited its decentralized exchange on the Sui network, stealing $223 million. The bounty, funded by the Sui Foundation, follows an earlier $6 million whitehat offer to the hacker for returning the funds. The incident has sparked a debate about centralization on Sui, as 114 validators collectively froze $162 million of the stolen assets. Cetus is working with US federal authorities, FinCEN, and other entities to track the hacker, who exploited a flaw in the protocol’s pricing mechanism. The DEX has paused all smart-contract activity and has not yet announced when normal trading will resume.
read moreTornado Cash Founder Accuses Feds of Evidence Withholding
Roman Storm, founder of crypto mixer Tornado Cash, faces charges of laundering $1 billion, including funds for North Korea’s Lazarus Group. While prosecutors dropped the unregistered money-transmitter charge following a DOJ memo, Storm’s lawyers claim the government withheld exculpatory evidence—a potential Brady violation. The undisclosed materials include a 2023 FinCEN call stating noncustodial mixers like Samourai Wallet aren’t money transmitters, which could undermine the prosecution’s case. Storm’s trial is set for July 14, with his defense arguing the withheld evidence has ‘materially prejudiced’ his position.
read moreTornado Cash Case: Defense Cites FinCEN Docs in Dismissal Bid
Tornado Cash developer Roman Storm’s defense has filed a motion to dismiss the case, arguing that prosecutors withheld critical FinCEN documents from 2023. These documents reportedly clarify that non-custodial crypto mixers, like Tornado Cash, do not meet the legal definition of a ‘money transmitting business.’ Storm’s attorneys allege that despite knowing this, prosecutors pursued charges against both Tornado Cash and Samourai Wallet developers. The motion highlights potential misconduct in withholding exculpatory evidence, which could significantly impact the case’s outcome.
read moreDOJ Proceeds with Charges Against Tornado Cash Developer
The DOJ has reaffirmed its commitment to prosecuting Tornado Cash developer Roman Storm on charges of money laundering and sanctions evasion, despite an internal memo hinting at a policy shift toward targeting individuals rather than platforms. Prosecutors dropped one charge related to operating an unlicensed money transmitter, acknowledging FinCEN’s 2019 guidance that non-custodial entities like Tornado Cash do not qualify. The case underscores tensions between law enforcement and DeFi developers, with industry leaders like Vitalik Buterin supporting Storm. A federal appeals court recently overturned Tornado Cash’s sanctions, but Storm’s trial proceeds, set to begin in Manhattan within two months. His co-developer, Alexey Pertsev, was previously sentenced in the Netherlands but released pending appeal.
read moreDOJ Advances Charges Against Tornado Cash Co-Founder
The DOJ confirmed it will prosecute Tornado Cash co-founder Roman Storm for conspiracy to commit money laundering, sanctions evasion, and operating an unlicensed money transmitter. While dropping one charge related to unlicensed transmission, prosecutors argue Storm facilitated illicit financial activity. The case follows a 2023 court rejection of Storm’s free speech defense and contrasts with recent DOJ guidance easing enforcement against mixers. Tornado Cash, an Ethereum-based privacy tool, was delisted from U.S. sanctions in March after a court ruled OFAC overstepped by targeting immutable smart contracts. The trial underscores tensions between crypto privacy tools and regulatory crackdowns on financial crime.
read moreTelegram Shuts Down $35B Black-Market Networks
Telegram has shut down thousands of accounts linked to Xinbi Guarantee and Haowang Guarantee, two black-market networks that processed over $35 billion in stablecoin transactions. Haowang, which catered to Southeast Asian clients, allegedly laundered $27 billion, while Xinbi handled $8.4 billion in USDT and offered services like sex trafficking. Despite the closures, operators are regrouping, with Haowang users migrating to Tudou Guarantee and Xinbi planning a ‘2.0’ relaunch. The Huione Group, linked to these networks, faces US sanctions for money laundering and ties to North Korean hackers.
read moreUS Prosecutors Deny Suppressing Crypto Mixer License Advice
Federal prosecutors have denied claims that they suppressed evidence regarding whether the crypto mixing service Samourai Wallet needed a license. In a May 9 court filing, they stated that all substantive communications with FinCEN were disclosed well before trial, giving the defense ample time to prepare. The prosecutors argued that no further hearings are necessary, emphasizing compliance with legal timelines.
read moreBlackRock’s Bitcoin ETF Sees $47.78B in Q1 Assets Amid Volatility
BlackRock’s Bitcoin Trust ETF (IBIT) closed Q1 2025 with $47.78 billion in net assets, down from $51.52 billion the previous quarter, tracking Bitcoin’s 11.15% price decline. Despite NAV compression, the Trust saw net share issuances of 43 million, reaching 1.013 billion outstanding shares, signaling strong institutional interest. BlackRock expanded custodial redundancy by adding Anchorage Digital alongside Coinbase, mitigating risks after the SEC dismissed its lawsuit against Coinbase. Regulatory and market risks, including U.S. initiatives like a ‘Strategic Bitcoin Reserve,’ were noted. The ETF’s $32 million Q1 revenue and $624 million in realized gains underscore its liquidity efficiency amid evolving digital asset regulations.
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