Keon (2:28)

Yeah, sure. So as you mentioned, I started my career in bitcoin@blockchain.info, now known as blockchain.com in 2012. And that's actually where I met Bill, who would co found Samurai Wallet with me later on. And to really understand why I co founded Samurai Wallet, I think you have to kind of understand why I got into bitcoin at all. And you know, when I got into Bitcoin 2012, it really wasn't about making money or, or number go up or you know, an investment. It was a real practical purpose. And I saw bitcoin as a truly censorship resistant version of digital cash. And that's what brought me to bitcoin. That's what I.

Keon (3:16)

I had been passionate about even prior to bitcoin. Right. So I spent a lot of time dealing with gold and silver because it was a bearer asset that couldn't be confiscated and you know, no one could tell me what I could spend that gold and silver on. So when I discovered bitcoin, I was like, oh, this is a better version of gold or silver. This is an electronic version of that. And I knew right when I discovered it, this is what I wanted to work on. And privacy to me wasn't like the thing I needed to work on because at that time to me privacy was obvious. If you have a censorship resistant form of digital cash, it needs to be private or it won't be censorship resistant. It seemed like a pretty basic thing. So really what I focused on at that time in 2012 was making sure any of this stuff we built was non custodial or self custodial or I guess the parlance of the day is self hosted. And really focusing in on that aspect of things. Right. Because the whole point was to get rid of intermediaries and third parties. So I wanted to make software that really put the, the end user in total and absolute control. And I thought at that time that privacy was just going to come naturally as part of the progression of the protocol. So all that being said, by 2015, I think I started to get a little jaded with the bitcoin space in general. And I think Bill was kind of right there with me in feeling that way. We felt like because of the run up in price and because of all the new entrants in the space, a lot of vc, a lot of traditional finance types, privacy was being pushed to the bottom of the priority list. Right. It was more about scaling at that point and less about privacy. And we saw that as a problem. Right, because if you didn't get take care of privacy on at this point, when there's not a huge amount of users, it's going to be very difficult to do it when there's billions of users and it's going to be very difficult to start changing the protocol. So we realized then that protocol is not going to change. They're not going to implement confidential transactions, they're not going to implement things of that nature, which I don't necessarily think is wrong, but it was something that we recognized. And instead of crying about it or making a fork of Bitcoin or moving to an Altcoin like Monero or something else, we said, well, we're into Bitcoin and the majority of people are into Bitcoin. They should have a private experience and they should be able to use Bitcoin in the way that we foresaw it, as a peer to peer cache. And if it's not going to happen on the protocol, then it needs to happen on the application layer. And the primary gateway for users to interact with the network is through a wallet. So let's create a non custodial Bitcoin wallet that is solely focused on the transactional privacy aspect of Bitcoin. And that's what we did with Samurai Wallet. That was the whole starting off point.

Marty (6:35)

And diving deeper to the philosophical side of this. We live in a day and age where many assume that privacy is a bad thing. Why? Why is that not the case? Like, why do individuals need privacy in their financial dealings?

Keon (6:52)

Yeah, I mean, people need privacy in every aspect of their life and people enjoy privacy in every aspect of their life. Even the people who say, oh, only criminals need privacy. Right. Those same people put their letters in envelopes and they put blinds or curtains on their windows. These are privacy technologies. Right. So I think in order for the human condition to flourish, privacy has to be part of that. Right. Because you have to be able to.

Keon (7:24)

Speaking specifically about transactional privacy or financial privacy. If, like me, you believe that being able to transact is a form of speech. Right. So you, for example, are supporting a political candidate or you're supporting financially, or you're supporting a charitable organization financially, that's a form of speech. And.

Keon (7:49)

If it becomes dangerous for you, like if you're not in the United States, you're in some authoritarian country, it's dangerous. It's dangerous to support a political opponent, or it's dangerous to support a charitable cause. That's, that runs, you know, contrary to what powerful people want. Right. So being able to do that in a way that's not going to get you imprisoned or killed or something else is essential. But even more practical than that, especially on Bitcoin, there's a safety issue. If anyone can look at the blockchain and see essentially your net worth in Bitcoin, you're putting a giant target on your back and saying, hey, I Have X amount of money rob me or kidnapping or torture me. And we've seen this happen countless times. And it's only ramping up. You know, so there's practical, you know, concerns with financial privacy. There's philosophical concerns of financial privacy being able to support the causes you want to support. But ultimately, all we really wanted to do with Samurai Wallet and Bitcoin more broadly is just replicate the existing financial privacy that you get in the existing traditional finance world. Right. When you go and use Visa at Starbucks, your Visa card, the barista or the cashier doesn't get to see what you spent your money on in the past, doesn't get to see what you're spending it on in the future. They don't know your bank balance. That's a private transaction. And that's what we wanted to replicate with Bitcoin.

Marty (9:25)

Yeah. And I think the aspect of Bitcoin that makes this particularly unique is the fact that it's a bearer instrument. Right. Many people say, oh, you can go look at the Forbes rich list and you can see all these extremely wealthy people, and they're not subjected to this. But I think the fact that bitcoin as a bare instrument really increases the.

Marty (9:47)

Security risks that exist for individual bitcoiners. And like you said, the $5 wrench attacks are only accelerating as more and more nefarious individuals begin to hone in on this key aspect of Bitcoin.

Keon (10:02)

Yeah, absolutely. And to the Forbes rich list, like, two points there, right? Like, you don't really know what other wealth those people have. You just know the public available information that Forbes prints. But I'm pretty certain a lot of those people on that list have more than just what's on that list. Right. That list is. And they're, they're not quite liquid. Like to your point about a bear instrument. Right. Their bank balance might be something, but that's all tied into securities and, and, you know, other investments and property, this and that. It'd be like them having that. That Forbes richlies walking around down the streets of Manhattan, just pockets filled with gold coins. Right. And you could see the outline of the gold coins in their pockets, and you could hear the, you know, the metal clanging together. That's a invitation to say, hey, rob me. I'm walking around with gold coins in my pocket. And that's essentially what you're doing when you transact on Bitcoin without any kind of privacy knowledge or strategy. Right. A lot of people just don't know the way the blockchain works, especially as Bitcoin's adoption has accelerated so rapidly, you have people who really don't understand.

Keon (11:18)

What they're doing when they are, you know, sending to their self custodial wallet and they're not taking into account that everyone can see. Anyone who's looking can see everything. And unless you're doing something specifically to, to combat that, and that's what the tools of Samurai Wallet were designed for it, it's pretty difficult to maintain a basic financial privacy. It takes quite a bit of work. So again, that's why we created Samurai Wallet and tried to make it as user friendly as possible so that the majority of people who aren't so technically minded and don't know the specifics on how to read a blockchain could benefit from the basic privacy that they deserve. And they probably thought they were getting, quite frankly.

Marty (12:05)

And I mean, it's obviously abundantly clear that the government does not like what you and Bill built with Samurai Wallet and what others outside of Bitcoin, Tornado Cash, Bitcoin fog, that was bitcoin related. But you have Roman going through some troubles there as well. They do not like individuals using Bitcoin trying to do it privately. And yeah, obviously you are intimately aware with the perspective of the government after the last few years and I think it's important for people to be aware of how their government views them through the lens of, of transacting privately. They do not like it. And you've experienced this uphand and personal, up close and personal.

Keon (12:54)

Yeah, it's actually still surprising to me because it became abundantly clear throughout this, you know, the last almost two years that.

Keon (13:07)

The government doesn't see any legitimate reason for financial privacy in general, not just on Bitcoin in general. And they have a open hostility to any kind of privacy. They feel the fourth Amendment that protects you from search and seizure is a detriment to their cause of pursuing justice and pursuing, you know, order, which is just such a shocking.

Keon (13:37)

It's so contrary to my worldview and I think a lot of Americans worldview that it's shocking to hear these people who are supposed to be these paragons of law and order and justice have such disregard for basic privacy of the citizenry. So yeah, it became abundantly clear that the government doesn't see any legitimate use for financial privacy on Bitcoin at all. And their whole case revolved around the idea that the only reason we created Samurai Wallet was to facilitate crime, not to do anything regarding, you know, privacy or protecting people's rights or giving people the, the, the basic privacy rights that they allegedly have, it was solely to facilitate crime, which is, you know, laughable because that's not why we got into this at all.

Marty (14:35)

It's not only laughable, it's scary. I mean, obviously very scary for you. You're going through, you've been sort of thrown through the ringer of the, the court system here in the United States. But.

Marty (14:49)

Like Matt and I, we've been literally up until the doj, the FBI sort of raided your house and took it to a cage. We would talk weekly about the software updates that you guys were incorporating into Samurai Wallet and literally teaching people listening to our podcast how to leverage tools like Samurai to achieve financial privacy.

Marty (15:16)

When using Bitcoin. And if you extend what's happening to you and Bill into the future and this precedent is set, what's to stop them from coming after individuals like Matt and I kind of alchemist others who care deeply about this and are trying to educate other individuals about how to use Bitcoin privately, that they're not going to be subject to some sort of.

Marty (15:43)

Blowback from the government because they're educating people about how to do this. Do they think we're educating criminals how to evade the government?

Keon (15:54)

Yeah, yeah, it's a absolutely legitimate and valid concern. I think, I think more builders within the space should be looking at what the government has done here and really shoring up their defenses both, you know, legally.

Keon (16:13)

To, to at some point expect the government will come knocking. And they don't just knock peacefully. You know, they come in heavy handed. I think miners in particular are going to be squeezed next. Right. Because if we're, if we're going by the government's theory that, and, and this is their theory with Samurai that you don't. That custody and control makes no difference to money transmission. If that's their, and that's their theory of Samurai, that's their theory in tornado cash custody and control makes no difference. Well, if you really want to put it through that lens, then the only people who are actually performing money transmission on Bitcoin network are the miners because they're the ones that are selecting which transactions go into a block. All of the transactions that Samurai Wallet created, while unconfirmed, there was no transmission, nothing moved. It wasn't until the miner included it in the block that it became a transaction for real. So I think miners are going to be the next ones that are squeezed and I think they'll do it in such a way to say, look, you need to only accept transactions from certain Counterparties like Coinbase and regulated exchanges, you can't accept self hosted transactions. And if you and you need to do OFAC screening and you need to do kyc, AML or your counterparty does, you know, I don't know when that's going to come, but that's. To me it seems like a pretty obvious next step for a government that wants to.

Keon (17:45)

Not destroy Bitcoin because that would be counter to their desires, right? They want to control Bitcoin and that's a great way to do it.

Marty (17:52)

So freaks, this rip a TFTC was brought to you by our good friends at BitKey Bitcoin. BitKey makes Bitcoin easy to use and hard to lose. It is a hardware wallet that natively embeds into a two or three multisig. You have one key on the hardware wallet, one key on your mobile device and block stores a key in the cloud for you. This is an incredible hardware device for your friends and family or maybe yourself who have Bitcoin on exchanges and have for a long time but haven't taken a step to self custody because they're worried about the complications of setting up a private public key pair, securing that seed phrase, setting up a pin, setting up a passphrase. Again, BitKey makes it easy to use, hard to lose. It's the easiest zero to one step, your first step to self custody. If you have friends and family on the exchanges who haven't moved it off, tell them to pick up a bit key. Go to Bitkey World. Use the key TFTC20 at checkout for 20% off your order. That's Bitkey World code TFTC20 sup freaks? This rip is brought to you by good friends at Silent. Silent creates everyday Faraday gear that protects your hardware. We're in Bitcoin. We have a lot of hardware that we need to secure your wallet emits signals that can leave you vulnerable. You want to pick up silence gear, put your hardware in that. I have a tap signer right here. I got the silent cardholder replace my wallet. I was using Ridge wallet because it's secured against RFID signal jacking. Silent. The cardholder does the same thing. It's much sleeker, fits in my pocket, much easier. I also have the Faraday phone sleeve which you can put a hardware wallet in. We're actually using it for our keys at the house too. There's been a lot of robberies. They have essential Faraday slings, Faraday backpacks. It's a bitcoin company. They're Running on a bitcoin standard. They have a Bitcoin treasury, they accept Bitcoin via strike. So go to slnt.comtftc to get 15% off anything or simply just use the code TFTC when shopping@slnt.com patented technology, special operations approved. It has free shipping as well. So go check it out. Let's dive into this key aspect here, which is the non custodial nature of Samurai and what the government claim that you're doing again, throwing this sort of technical detail to the wind for money transmission laws. And I guess let's just go through the history of the prosecution, particularly the detail about FinCEN and their call to FinCEN, what they found out, what they hid from the defense and how that came.

Marty (20:15)

How you became aware of that and how it became part of the trial and then ultimately what it was looking like before the plea deal, why you guys decide to plea and what type of precedent this sets.

Keon (20:30)

Sure, yeah. So I mean it's important to start the story with FinCEN. And FinCEN is the financial Crime Enforcement Network. It's the regulator as part of the treasury that's in charge of money transmission and combating illicit finance and money laundering. In 2013, they were one of the only regulators to put out pretty clear and common sense guidance when it comes to Bitcoin and other cryptocurrencies. And they clearly stated in 2013 that in order to be a money transmitter, as they saw it, and get a license from them, you needed to take custody and control of the money or the crypto or whatever you want to call it. Right. So that was a key aspect to FinCEN that if you took custody and control like an exchange, for example, then you were a money transmitter and you had to register with FinCEN and get a license. They then followed that up in 2019 and made it even more explicit and said if you're an anonymity provider, software provider that does not take control of customer funds, then you are not a money transmitter. Pretty straightforward. We as Samurai Wallet, who started in 2015, so two years after the initial guidance, saw that and said pretty straightforward. We're not a money transmitter if we don't take custody. We've never taken custody. Not a single one of our tools we've ever created takes custody. We're not a money transmitter.

Keon (22:07)

So fasting. Fast Forwarding now to April 24, 2024. When the FBI conducts a pre dawn raid on my house and arrests me, I come to find out that I'm charged with two crimes, conspiracy to commit money laundering and conspiracy to operate an unlicensed money service business, an msb. And the agency that would get you would get the license from, to be an MSB is FinCEN, the Financial Crime enforcement network. So, you know, I'm thinking about this and saying, well, FinCEN's always been really clear on their guidance that you can't be a money transmitter if you don't have custody. So the government must be confused. The government must think that this is like an old school traditional mixer that would take custody and then send, send the bitcoin back out, kind of like bitcoin fog did. And all of these old school mixers, they must be confused about how this works because surely if they knew, they wouldn't bring this charge. And same with money laundering. How can one launder money if they never had the money? Right. It's a common sense reading of the statute, would mean if you're a money launderer, you need to actually take the money to launder it. So.

Keon (23:28)

That was kind of our, our understanding through FinCEN. And part of our defense was going to be that the, the guidance was so clear from FinCEN and the government never got in contact with us, the DOJ never tried to communicate with us and say, hey, we think you're breaking the law here. Right? So there's like a due process violation. You can't really be guilty of something. If all of the guidance and all of the literature and the regulator saying one thing, then the government comes up and says, oh, actually what the regulator says doesn't matter. What we say matters. That's a due process issue. So.

Keon (24:09)

One of the things that happens in a criminal trial that your listeners may or may not be aware of is a sharing of discovery. And the government needs to provide to our lawyers all of the evidence that they have against us, including what's called exculpatory evidence, meaning evidence that's actually helpful to us, evidence that may exonerate us from the crimes. And this is a legal requirement that they hand over all of this information. And so they handed over tons of information and discovery, but they didn't hand over everything we came to discover because my lawyers wrote to the government and asked them very specifically, did you ever have a conversation about samurai wallet with FinCEN? And the government then had to reply, oh, why yes, we did. And here's conversations that we had. Now the government was supposed to hand that over to us without us asking because you may not know what to ask, you may not know what questions to ask the government in order for them to send over the. The evidence. So Supreme Court has said that the government has an obligation to hand over everything without being asked and to do so in a timely manner. We got that information a year after the prosecution had been going on. And when we looked at that information, that evidence, it was a bombshell because they had asked FinCEN six months before indicting us if they thought. If FinCEN thought that we were operating a money service business without a license, which is, again, this is the agency that gives out the licenses. And FinCEN said, no, they're not a money transmitter because they don't take custody of anyone's funds clear as day. But it didn't matter to the government because six months later, they indicted us anyway, with one of the charges being, you know, operating a money service business without a license, even though the people who give the licenses said we didn't need a license.

Keon (26:16)

So that was a huge bombshell, and it was something that we thought was very important. And, you know, we needed to get the judge involved at this point to say, hey, one, why didn't you hand this over when you're supposed to? And two, what other information aren't you handing over? We need to have a hearing about this and figure out exactly what evidence exists that you're not sharing with us.

Marty (26:41)

And what happened at that point?

Keon (26:44)

Well, we wrote that motion. It's called like a. It's called a brady violation when the government does that. It happens all the time in a criminal trial. Government almost never hands over the information they're legally required to hand over. We wrote several motions at this point. One was about this brady violation. One was a motion to dismiss the indictment, and one was a motion to allow third parties to write to the judge and explain aspects of bitcoin to the judge that the judge probably doesn't know about. Right. So Coin center, for example, which is a bitcoin advocacy group in D.C. they wanted to submit a submission to the court just to give the judge some more working knowledge about bitcoin and non custodial versus custodial and what that all meant. So you have to get permission from the judge to let these people submit this stuff, which is very common most of the time. Judges accept it because they want to know as much information as possible. So the. So we made those motions, submitted them to the court, and then about a few days before we were meant to go and argue those motions in front of the court, our judge changed.

Keon (27:58)

Suddenly, which is pretty unusual for criminal cases. Usually you get a judge and that Judge sticks with you throughout the whole case. So we got a new judge and this judge has a pretty, pretty strong reputation as being a one, a pretty heavy sentencer. So if you, if you go to trial, get found guilty, she's giving you the max sentence almost every time. And two, it was formerly a high level prosecutor in the Southern District of New York herself. She was the head of the criminal division at sdny. These are the same people who are prosecuting me now. So, you know, very usual, very pro prosecution judge, A little concerning, but we didn't really know what to expect. We hadn't seen her yet, hadn't appeared in front of her. So a couple days go by and now it's time to appear in front of her for the first time and argue the motions that we had submitted to the court. And.

Keon (28:52)

I just want to take a moment to give your listeners an understanding of in particular the motion to dismiss. Because that's, that's an important point in this whole story. At this point of proceedings, you write a motion to dismiss indictment and as the defendant, you have to at this point assume that everything the government has said about you in the indictment is true. Right? You're not there to argue the facts of the case because juries are the ones who decide facts. The judge is the one who decides the law. And in the motion to dismiss, you have to keep it solely on the law. So you're saying anything the government said is true and it should still be dismissed because of XYZ points of law. And we wrote a really phenomenal motion to dismiss. A lot of research, a lot of time went into it and we found various precedent setting cases, Supreme Court cases that really tied into this situation beautifully. Two I will mention briefly, one was in 1940, a sugar distributor was charged with a conspiracy charge, just like we were, because he knowingly sold sugar to a bootlegger who is creating alcohol, which was illegal at that time. And the Supreme Court said you can't convict him of conspiracy just because he had some vague knowledge of a crime. Right. He had to be actually part of the crime. And just by selling the, the sugar, that didn't make him part of the crime. And then the second one that was really compelling was a case from the 90s, a grow light manufacturer. So usually you use like grow lights when you're growing tomatoes or hydroponic systems, that type of thing. They got this guy on a conspiracy charge because he knowingly sold his grow lights to a marijuana dealer or grower and he even advertised his grow lights in High Times magazine, which is a marijuana enthusiast magazine. And he even had jokes, which the government is, doesn't have a sense of humor. They do not like jokes. And he said to the person he was selling to, I don't even want to know what you're doing with these slates. Right? And he got convicted on conspiracy in front of the jury, and then it was overturned on appeal because again, the appeal court said just mere knowledge isn't enough. You have to be part of the actual criminal act itself. So we were pretty confident in our arguments, but on this motion to dismiss, and if, even if we didn't think it was going to work and she was going to, going to dismiss the indictment, because that's pretty rare, we still thought that she would have an opinion on it, and it tell us why she's either approving or denying the motion, granting or denying it. So we go into court, we have our, all of our motions. Keep in mind, getting to this point alone has cost us about a million and a half dollars. Right? Getting this motion, getting all this stuff together, very expensive process. And we're ready to argue. And no argument. She says, I don't need any argument. I've read all the motions. They're all denied. And that was it. Right. So she didn't, she didn't have any argument on the Brady violation, no argument on the motion to dismiss, no argument or, or anything on the, the amicus briefs for the third parties to give her information, all denied with one word and no oral or written opinion as to why she was denying it. So we just had nothing to even work with. So at that point, when that happened, I kind of looked to my lawyer and was just like, what is going on here? Like, this judge isn't even going to listen to our arguments. You know, she even isn't going to, you know, entertain a, a, a free and fair trial. This is not going to go well. And at that point, I think my, my mindset shifted from we're going to put our version in front of the jury, we're going to have a fair trial, the jury's going to examine the facts and make a determination, and I think we're in the clear to there's no way that this judge is going to let us put on the defense that we want to put on. We're not going to get a fair trial, and the jury is going to have no choice but to convict us based on the evidence that they get to hear. Because again, people think everything comes out at a trial. It doesn't the judge has so much control as to what evidence the jury actually ends up hearing that I really felt that going to trial was going to end in a conviction and that conviction would be a 25 year sentence just knowing how this judge operates. So that's, that's where I, my head was at at that point.

Marty (33:35)

Suffreaks 2025 left many wondering was this an underwhelming year for Bitcoin or the quiet setup for an extended bull run on December 17th at 1pm Central, join Preston Pitch Connor Brown and Unchained for Bitcoin in 2025 a year in Review, a concise breakdown of the macro trends and policy developments that truly shaped the year. You'll hear what mattered most, where the market stands now, and what these inflection points reveal about Bitcoin's long term direction. If you want clarity on where Bitcoin has been and where it's headed next, don't miss this event. So go Register now at unchained.com/tftc. That's unchained.comtftc sup freaks healthcare Open enrollment has started. It will roll through the end of January. Opt out of traditional health insurance, which doesn't care about you. It's impersonal. It's expensive. They deny an increasing amount of claims. Premiums are going up. You don't have to live this way. You can opt out. I opted out four years ago and joined crowd health. I've been a crowd health member, a very happy crowd health member for four years. I've had two children. A couple of health events in that time period and crowd health has been there. You pay a monthly fee, you contribute to the crowd. We were paying $1,800 on Cobra as a family of three. Now we're paying around $900 a month. Family of five. And that's with crowd health and direct primary care. You can opt out of health insurance. Go to joincrowdhealth.com TFTC you're gonna get 99amonth for the first three months if you use the code TFTC. Joincrowdhealth.com TFTC did they give any reason for why they switched the judge midway through the trial?

Keon (34:54)

Nope.

Marty (34:55)

Oh, this is kind of mind blowing. I mean, it's like, do we actually live in a, in a free country? And I think even outside of this case, I think it's becoming pretty clear that judges are exerting way too much power over the legal system in the United States. And the fact that she wouldn't Even hear arguments to. It was something like, what is the judge? What are they supposed to. They're supposed to be some sort of impartial arbiter of the law. And it's very clear in this case and many others that these judges have, have a bias and ego and hubris that's really tied into their careers.

Keon (35:39)

Yeah, I think especially in the Southern District, almost all the judges there are formerly prosecutors. And I think it's true broadly in the federal system, which there's just. I understand they have to come from somewhere, you know, so you're gonna inevitably have, you know, prosecutors become judges. But there's a bias just implicitly in that. Right. Where, oh, I was a prosecutor, I know how it works. There's some credibility that the prosecutor has. If there wasn't actually a case here, the prosecutor wouldn't have brought it all. That kind of builds in, into the system when it really shouldn't be that way. You know, there's. It should be non biased. It should be, let's figure out the truth. And what I discovered in this entire process is the truth does not matter. The truth is inconsequential to a criminal trial, a federal criminal trial. The prosecutor has decided pre indictment and they will, you know, force feed any evidence they can get into their narrative, and that's that. Even if their narrative becomes untenable, they'll never admit that. And they will go as far as they can go even if they know it's not the truth and that it, you know, again, I knew there was something wrong with the justice system. We all kind of know there's something wrong with our justice system. But you still think that, well, it's probably the best in the world, even with all its problems. And it's probably, you know, one of the most fair. It's probably better than a lot of other places. And then you go face to face with the Department of Justice and you go, oh, this is a clown show. This is a circus. And it's not just me. I mean, this is happening to a lot of people, you know, so it's, it is definitely a, a sobering experience.

Marty (37:31)

Yeah. An indictment on the state of the United States, particularly the justice system.

Keon (37:37)

Yeah.

Marty (37:38)

Like what, what, what is this contract we're engaged in with the federal government? If the Department of Justice feels very emboldened to not show impartiality and just put up judges who are going to dictate the way they think things should be dictated? I mean, this gets to the broader question of the times that we live In, I mean obviously everything's getting hyper digital surveillance state is being erected quicker than ever now, especially with AI all around us. And many people are asleep at the wheel, not really noticing that it's happening. Even some people are, I think intuitively and implicitly understand that it's happening. But I don't think they understand the scale or the desires of the federal government and what they would like to cattle herd individual citizens not only here in the United States, but globally into so they can, they can tag, track and bag whoever is stepping out of line and something as what for the longest time for human history was innocuous financial privacy. I think they're trying to make an example out of you specifically just to send a message, a chilling effect like, hey, there will be no privacy.

Keon (38:57)

Yeah, I agree with that completely know. So for the, again, for the longest time, we, we operated openly for 10 years, right? So it's not like we just came on the scene and they took us out. You know, we, we've been operating openly for 10 years and we, we thought, and I still think that what we were doing was legal, right? We didn't take custody and we figured out a novel way of providing very strong privacy protection on Bitcoin without taking custody. And they did not like that, right, because they could go after bitcoin fog and they could go after the old school mixing tools because all those tools took custody and they had existing laws in order to, to get them and they got them fairly easily, right? But then suddenly all comes Biden's Department of Justice, which really had a negative view of crypto and they needed to figure out a way to take us out when we didn't have those same issues, right? We didn't take custody. Guidance was on our side. FinCEN was on our side. How do we get them? And at that point it kind of my discovery is that precedence law, truth, none of it matters. If they want to take you out, they will take you out. And doesn't matter what the regulator says, it doesn't matter how the actual thing works. It doesn't matter, you know, that, that what they're going to do is upending, you know, years of precedence. They don't care. They're going to do it and try to get away with it. And unfortunately in this case they managed to get away with it, right? The what I pled to unlicensed money transmission is the charge that FinCEN said I didn't need to be licensed and no one cares about that in the system.

Keon (40:55)

You know, they got their Win.

Keon (40:58)

What?

Marty (40:59)

I mean, it's, again, incredibly scary. What do you think needs to happen to sort of force these institutions to care about this stuff broadly?

Keon (41:09)

I don't know. I think on a micro level, the Trump administration needs to clean house at the Southern District of New York. I think that's really one of the most corrupt U.S. attorney's offices in the country. And it's something that President Trump should know himself. He's dealt with them, they've come after him. Right. And, you know, they, they've ignored so much about what his administration said they wanted to do. Right. So we had Todd Blanch, the Assistant Attorney General, write a memo, the Blanche Memo, that was, I mean, it couldn't have been about any other case other than Samurai Wallet and Tornado Cash. It was, like, written about us, this memo, and it said, mixers tumblers are software developers are not going to be held responsible for the crimes of their end users. We're going to go after the actual criminals. Clear as day. Southern District ignored it. They ignored their boss, the deputy Attorney general, and they continued ahead. Just the fact that we were brought under indictment in the Southern District of New York is crazy because we hadn't been to New York. Right. And their claim is, well, you know, someone in New York could use the app, so we have jurisdiction. It's insane. So, I mean, I think that Trump and the administration should take a cold, hard look at the Southern District, which is just, they have, their, their nickname is the Sovereign District of New York because they do what they want. And that's. They've done that for a long time. Getting them under control, I think, would be a good start. Besides that, I don't know. I, I mean, I think it's just a inherent problem with our system.

Marty (42:54)

Yeah. Now, the fact that they got the case in the first place, you make a very good point. Is astonishing.

Keon (43:00)

Yeah. You know how they did it? They got. They sent some FBI agent into the streets of Manhattan who opened up his phone, downloaded Samurai Wallet, made a transaction into Whirlpool, and that gave them the jurisdictional ability to bring charges against us.

Marty (43:17)

That sounds like a conspiracy.

Keon (43:19)

Right? It's crazy. It's crazy. We had never done business in New York.

Marty (43:25)

Are they allowed, Are they allowed to just contract FBI agents to go do this stuff?

Keon (43:30)

Yes, apparently. I think they, they, they can do whatever they want, you know, and even if what they do ends up being illegal, which has happened, they have prosecutorial immunity. You can't do anything about it, you know, so they are a protected class. Yeah.

Marty (43:48)

And I don't know, I forget if I cover it in the newsletter. When I did a video last week on this case and just juxtaposing the treatment that you've received.

Marty (43:58)

In the numbers that they cited.

Marty (44:02)

In the prosecution, I think it was like $236 million in volume and gone through Whirlpool. And then you look at just JP Morgan alone since 2000, they've paid $40 billion in fines for way more.

Marty (44:17)

Money laundering.

Marty (44:20)

And no CEOs, no executive, no raids, employees, no raids, nothing. It's just the cost of doing business.

Keon (44:28)

And yeah, yeah, I mean, I think JP Morgan Chase, all those guys would have killed for a ratio that we had. Right. So here, here's the government's numbers. I, I haven't checked them. I don't know if these numbers are accurate or not, but this is what the government is saying. So in, in the indictment, they said $2 billion worth of unlawful transactions, not illicit unlawful, went through Samurai Wallet. What does that mean? The government's contention is that Samurai Wallet was a financial institution and as a financial institution has the obligation to perform KYC and AML on all of its users. And because we didn't perform any KYC or AML on our users, every dollar that went through Samurai Wallet was on lawful. That's why the total amount of 2 billion is all unlawful. Then of that 2 billion, they say 237 million were the proceeds of illicit activity of crime. And that was the amount that we allegedly laundered by creating samurai wallet. So 237 million out of 2 billion. Okay, that's like 10%, right? JP Morgan Chase, HSBC would kill for 10%. Their numbers are way higher in terms of illicit stuff. And they know about it too, right? And they court it and that's why they keep getting these fines. And you know, so the government was saying that 237 million, bill and I would be responsible for paying in restitution to the government. They knew full well we never had a cent of that 237 million because they acknowledged that Samurai Wallet was non custodial. We never had it, but they were going to make US pay that 237 million to them in the event of a conviction, which essentially is a life sentence. Right. So a conviction is 25 years. And when you finally get out after 25 years, you have a $237 million debt on your head that you need to pay the government. You can't travel, you can't leave, you're under basically supervised release for the rest of your life.

Keon (46:43)

They knew full well that we couldn't pay it. So what they did was as part of the deal, they said, well, samurai wallet earned 6 million in fees over the course of 10 years that you operated. So you pay us that 6 million that you earned total and we'll consider the $237 million fully satisfied. So that's part of the deal we ended up taking.

Marty (47:10)

And I saw you watch you talk about this on pot 256. But I think it's important to reiterate here. I mean, the means by which the Department of Justice is attributing that illicit activity that went through samurai is murky in and of itself. Chain surveillance tools, chain analysis historically is not as accurate as they claim to be.

Keon (47:35)

Definitely. And you know, they can't show their work. They, they, they basically get a report from, you know, Chain Aliceis or Elliptic or one of these other tools and they run with it. And no one can actually say, well, how did you get to that conclusion? They say the Silk Road coins are going through whirlpool. But we already know that the Silk Road cluster, that chainalysis and elliptic and all these companies use is pretty polluted stuff that has no relation to Silk Road gets clustered in and tied into being part of Silk Road. But we don't know. And that would have been something that we would have had to deal with at trial trying to figure out and cross examine their experts. But we already know from the Roman sterling of case and Bitcoin fog that you can't cross examine those people because they'll, they'll make a case in national security and that's it. They use those magic words and suddenly our, our, you know, our system, our constitutional right to confront our accusers goes out the window. So that would have been an uphill challenge at trial, but one that we were willing to fight.

Keon (48:47)

Knowing that it's a, it's a tough thing to do, right? Because they get to say, these came from North Korea, these came from the Silk Road, these came from so and so. And then we have to go up there and say, no, they didn't. And the only way you can do that is by cross examining that witness saying, well, how did you come to that conclusion? What's the scientific method you use? What's the error rate of this, this heuristic that you're using and you're not allowed to do it. So that would have been, that would have been tough. But I mean, even if that's true, and it could be true, right, I would not surprise me if North Korean hackers used Whirlpool. Wouldn't surprise me because of course bad actors are going to seek out privacy tools. They always have. They use tor, they use VPNs, they use Signal, people use technology and bad actors use technology. So that wouldn't have surprised me. And that's I think, really the key to the government. Just my mere knowledge that bad actors could use my tool meant that I was guilty. That's where they got me. They said, you knew and you continue to do it. Therefore you conspired with them by you building this software knowing that bad actors could use it. You conspired with those bad actors to create a money laundering empire. Right?

Marty (50:03)

Yeah, I mean, and this is the craziest part because 90, I mean, even going off the government's numbers, which may.

Keon (50:12)

Be.

Marty (50:15)

Which may be exaggerated to the higher end because of the murky chain heuristics, chain surveillance heuristics that we just discussed, like the fact or the potential for them to shut down these technologies, just come in with a rubber stamp, an iron boot and stamp them out. Because there are nefarious individuals also using them as completely insane. I mean, going back to what we were talking about earlier about the sort of security risk that's introduced if people know exactly how much Bitcoin you have and in which wallets it sits in. The fact it would prevent law abiding, privacy conscious individual citizens from accessing this technology because a few bad actors may be using it as well as. Completely insane. Yeah, and I don't know, it's, it's.

Marty (51:12)

I try to be optimistic, but it's like cases like this, your case particularly, it's just like, holy crap, what, what world are we living in? Does the government even, are they even going to try to pay lip service to the fact that we live in a free country and as individual citizens we have inalienable rights that, that we are God given, rights that we can defend and leverage. It doesn't seem like that's the case anymore.

Keon (51:41)

No, no, not, not in that court at least. And not with those, those prosecutors, like I said, they, they have an open disdain for the rights of privacy and being secure from search and seizure, an open disdain for financial privacy. And not just them, the judge as well, you know, the judge as well. So it's a, a losing battle in the Southern district of New York. That's, that's for sure. And it's just, I, I want to make it very clear that the government.

Keon (52:11)

Didn'T charge any of these criminals didn't go after any of these actual criminals. Right. They went after Bill and me who made a tool. But the alleged hackers and money launderers and this and that have not been charged and they didn't have someone to bring up. And this is why they charged us with conspiracy instead of actual money laundering. Because if they would have charged us with actual money laundering, they would have had to bring up somebody to say, yeah, I, I sent my money to Keoni and he laundered it and we agreed to do this. They didn't have that person because that person never existed. Because I obviously did not get into this to create a quote unquote criminal money laundering enterprise. You know, and if I had, I certain certainly would have wouldn't have only earned $6 million over 10 years. Right. That's not a money laundering enterprise. That's a pretty modest amount to have earned over 10 years and one and something that I'm very proud of. And you know, building an open source company, an open source tool and monetizing it in a way that we could at least keep it going for a decade is a point of pride that I have and that's something they absolutely will not take away from me. I'm proud of what we built at Samurai.

Marty (53:31)

And you should be, you should be extremely proud because these are extremely important tools that people need. And again, it's just crazy that you, Bill, others building non custodial software that helps people attain privacy on Bitcoin and other chains for that matter, have to feel like actual criminals. And the fact that they didn't bring anybody forward, it's just incredibly poetic in a way in this.

Keon (54:00)

No victims. No victims and no criminals.

Marty (54:04)

Yeah. So obviously now you guys pled down, you're facing five years in a cage. Sorry for putting it that way, but I think it's important to be, to be blunt here.

Marty (54:21)

Looks like the only potential to avoid this is a pardon from President Trump. What is the case, what would you put forth as the case for a pardon from president. If you could speak to the President directly, I know he listens to the show quite frequently. What would you say to him?

Keon (54:40)

I think I, I don't know what I would say to him exactly, but I think the President has an innate.

Keon (54:47)

Barometer for fairness. He knows what's fair and what isn't fair. He knows what's in just and what's just. He himself has been the target of injust lawfare used against him and his family. Right. So I think he knows the what it looks like when he sees it, and if he understood.

Keon (55:08)

This case, he would see it is profoundly unjust. And I think the strategy at this point is to raise enough noise and awareness around this campaign, around this case to get it in front of someone in the administration who could bring it to his attention. He said he wanted the, the US to be the crypto capital of the world. So do I. But you can't do that if you're putting your builders in prison. Right. And he wants the, his Department of Justice, Todd Blanche wants the Department of Justice line prosecutors to focus on crime, which would be great, not focus on builders, and hold them accountable for their users actions with him 100%. But his U.S. attorney's offices aren't following that directive. He wants a strategic Bitcoin reserve. And he wants, if you do have to forfeit bitcoin to the government in a criminal action like we had to, he wants that Bitcoin to become part of the strategic bitcoin reserve. Well, I hope that he is aware that the Southern District of New York disregarded that executive order and immediately sold the bitcoin that we forfeited to them. So bypassing his executive order for strategic bitcoin. Yeah, yeah. It's lawless over there. They do what they want and the President needs to know that they do not respect him. They do not respect his administration. They do not respect main justice. They do what they want there and they get away with it constantly. So I think the President can restore balance to this, can restore the injustice that has occurred in this case by granting Bill and I full pardons and then turning his attention to the Southern District of New York.

Marty (57:01)

Yeah.

Keon (57:03)

If.

Marty (57:05)

Even if you and Bill, when you get pardoned, we're going to manifest it. When you and Bill get pardoned, does the plea deal, is that still set a precedent that could be used in future cases?

Keon (57:15)

No, no, no. That was, that was a consideration. So the way court, court precedent actually works is true. Precedent doesn't get sent, doesn't get set at the district level. Right. And that's where we were at. It gets set at appellate and above. So if we were found guilty, for example, at a trial, criminal trial, that wouldn't be precedent. It would be like, I forgot the exact term they use, like persuasive authority, I think is the exact word they can use. So the concept is that a district judge is not bound by the decision of any other district judge. Right. So they, they can, they can look at that case and say, n, I disagree. Or they can go Yeah, I agree. So we would have had to appeal it up to the appeals court to get actual precedent. And this is what Roman Storm is doing. Right. So Roman Storm with Tornado Cash, he went to trial. I don't know if they offered him a deal or not, but he went to trial and he was found guilty of on the charge that Bill and I pled to, same charge, unlicensed money transmission. And it was a hung jury on money laundering.

Keon (58:23)

So he gets to appeal that conviction of unlicensed money transmission and he's going to appeal it and he's going to raise at appeal the fact that it's a, as a matter of law, you cannot transmit money if you've never had the money to begin with. And I think he has a pretty good shot on appeal there because the appeal court, they look at this sort of thing. So that's where precedent will get set. When he does that for us, because we didn't go to trial and we took a deal, there is no precedent, nor is there any persuasive authority. It's just done, it's a deal. But all that said, the government doesn't care about precedent. If they want to go after you, they will go after you. They. There was no precedence in going after Samurai Wallet. There was no precedence that an unlicensed money transmitter could be non custodial. Everything was said otherwise. And that doesn't matter. They will make precedents when they want to make it. They will spin things when they want to spin it. So we give a lot of weight to this legal concept of precedents and it doesn't matter. They do what they want when they want. And unfortunately that's just true.

Marty (59:38)

It's fucked up. How.

Marty (59:42)

How has this affected you? I mean, obviously it's been a long couple of years. How are you holding up? What, what's gotten you through.

Marty (59:52)

Through this? How are you, how are you, how's your mental state approaching the time at which you have to report to prison? When. What does this do for the individual?

Keon (60:02)

Yeah, I mean, it's tough. You know, I, I tried to look on the bright side of things, right? It could have been worse. I could have been held in pretrial detention, which would have been difficult to, you know, aid in my defense. I was lucky that I was able to get bail and go home and spend time with my family and my wife. So I try to look on the bright side of things. But even, even that is tough. You know, you're sentenced to home incarceration, meaning you can't leave the Four walls of the house.

Keon (60:33)

And it's, you know, for someone who is not used to that, right, Is used to being able to go on a whim, go shopping or go to the park or go for a hike or a walk, that getting used to not being able to do that does take some time. And I guess it would be quite easy to kind of go stir crazy, right? And I joke about it because.

Keon (60:58)

Like, they didn't get me on. On COVID lockdowns. Like, I completely disregarded that. And I would go out for walks and I would do whatever I wanted. I wasn't going to be stuck in my house then. So I laugh at my wife. I say, well, they finally got me, you know, they. They finally got me into lockdown.

Keon (61:14)

So I guess, you know, I guess some people did experience that, so they know what it's like being cooped up inside.

Keon (61:20)

So it's just been, you know, trying to fill the time primarily. I think the biggest thing to get used to was for 10 years, I would get up every day, five or six in the morning, and essentially start work, work on Samurai, talk to Bill because he was in Europe. So it was a perfect kind of time zone thing. Start talking to Bill, start talking to the other people on the team and just get moving. How are we going to change bitcoin today? How are we going to, you know, deploy software in a way that no one has seen and just go 100, 110%? And we did that for 10 years. Just suddenly nothing, right? Nothing to work on, nothing to build. Can't talk to my friend who I've talked to hours a day for 10 years. Can't talk to all the other people involved in Samurai.

Keon (62:12)

Completely isolated. That was. That was tough getting used to. And I think I just filled. I filled my day with reading, with learning new stuff, playing around with, you know, little projects I could do on my computer, coding ideas that I may have had throughout the years and just tried to fill. Fill the time. And now it's just a waiting game. I report on December 19th. So I have, you know, 10 days. So it's just spending time with my wife and my family and making sure everything logistically is ready for me to be away from the house, the household.

Marty (62:51)

Yeah, I'm sorry you have to go through this.

Marty (62:57)

It's really demoralizing. Can't imagine for you, but even.

Keon (63:04)

For.

Marty (63:04)

Someone who cares, I mean deeply about bitcoin, but just human liberty generally, at the end of the day, it's insane to me that you and Bill are Going through this and we even have to have this type of conversation in 2025.

Marty (63:21)

Yeah, I mean, if anybody who's listening to this is close to the administration, I think Keon has made a pretty cogent and clear case here that this was not justice. At the end of the day, if anything was.

Marty (63:38)

Unjust, what's. What's happening, it is unjust. What's happening to you, Bill, and others in the non custodial privacy space across crypto right now. And I think this is a critical sort of inflection point.

Marty (63:56)

Because it seems pretty clear that governments around the world want to lean into this technology. Bitcoin crypto, a lot of them are focused on stablecoins and other things, but.

Marty (64:07)

We need to make sure that we preserve privacy and liberty in this digital age with these digital currencies. And if we stomp that out at the beginning, we're 17 years in, but it's still the very beginning of humanity leveraging these technologies. It's not a very hopeful future. In fact, it's bleak. Very, very despotic.

Marty (64:31)

So if anybody's listening has the ear of the administration.

Marty (64:36)

I think this is a critically important.

Marty (64:40)

Topic to, to really lean into and focus on and make sure we get this right for not only ourselves, but our children, grandchildren, people that will be born decades from now.

Keon (64:54)

Yeah, I, I agree completely. You know, it's. I've always said that bitcoin broadly, I guess crypto in general, but bitcoin broadly, really has a potential.

Keon (65:07)

To advance human freedom like no other technology before it, but the, the same side of the coin. It has the ability to become a surveillance panopticon and completely enslave us. And we really have to be vigilant and do the right things to keep that from happening. Right. We do not want a totally surveilled open network. Right. We want private digital cash. And we can have it. We're so close to having it. And we need to make sure that that's what our focus is because the alternative is, is very dreary.

Marty (65:50)

Truly is. Kian, thank you for.

Marty (65:54)

Your hard work on bitcoin Samurai Wallet for more than a decade now.

Marty (66:01)

And wishing you, Bill, everybody, really the best of luck and hopefully sensible individuals rise up and right this wrong issue. You a full pardon. You and Bill, full pardons. Roman Storm as well, even though he's appealing his case right now. I think again to what you said earlier. If we want to be the bitcoin crypto capital of the world, stuff like this cannot happen. You're not going to be the Bitcoin capital of the world if the builders are being thrown in cages for writing software, open source software, non custodial software that just simply enables people to use Bitcoin smarter in a more private way.

Keon (66:51)

Yeah, absolutely.

Marty (66:54)

We will link to the change.org petition.

Marty (66:58)

Billandkeon.Org as well. Logan and yeah, I admire the the strength that you're showing through all this. I've been watching a lot of the interviews that you've been a part of the last couple weeks, and it is incredibly impressive that you're as put together and sort of steadfast as you have been the last few weeks. So you're, you're much stronger than I may be if I were in a similar situation.

Keon (67:27)

So I appreciate it. Marty. Thank you for having me on.

Marty (67:32)

All right, make some noise, freaks.

Keon (67:34)

Peace and love.

Marty (67:36)

Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.