The Samurai Seizure and the Case for Rules

A website replaced by a seizure notice, and a Bitcoin show host who refused to panic.

This is the Mining Disrupt News Surge for Monday, April 29, 2024. Bitcoin traded at $62,262 that day. Today it trades at $79,649.

Days earlier, U.S. authorities had seized the Samurai Wallet website and charged its founders. Bitcoin Twitter lit up. The host walked through a post by Samson Mow that broke the case into four points: Samurai was a self-custodial wallet, it was a mixer, it gave ordinary people privacy, and, according to the charges, its operators knowingly marketed it to criminals. The charging language cites a 2022 post that welcomed Russian oligarchs trying to get around sanctions. Those were allegations, not convictions, when the episode aired.

The host drew the line at the marketing. "you can't just have your own private bar where you're brewing a bathtub moonshine and serving it to people," he said. Advertise that you serve anyone, with no ID checks, and the police will come.

Many listeners feared a ban on self-custody. The host read Daniel White's reply: prisons ban drugs and weapons, and both still trade inside them. Another post asked what the legal basis for a ban would even be, when people already hold their own gold and diamonds.

What bothered him most was a statement from Zeus, a Lightning wallet, saying it follows the letter of the law, will adjust if the law changes, and is not going anywhere. Many people cheered it as defiance. He heard a company promising to do whatever it was told.

There was good news too. BNY Mellon reported in an SEC filing that it owned shares of BlackRock's and Grayscale's Bitcoin ETFs. Mark Yusko of Morgan Creek Capital predicted $300 billion would enter the space within 12 months. Hong Kong's Bitcoin ETFs were 2 days from launch.

His closing argument was the one many listeners did not want to hear. As Bitcoin matures, he said, "it's going to need to fall within the regulatory framework of the current law of the land." Bitcoin has SEC-approved ETFs and sits on MicroStrategy's balance sheet, and that attention does not come with an anything-goes approach. More crackdowns on the loose side of the market, he said, would be a good thing.

The full story is on Mining Disrupt at miningdisrupt dot com, and many more like it play around the clock on Bitcoin Radio.