DOJ Arrests Samourai Wallet Founders, Triggering Crypto Market Plunge

The cryptocurrency market plummeted due to the news of Samourai Wallet founders' arrest by the DOJ and amid the ongoing Middle East tensions following the Bitcoin halving. Leading cryptocurrencies like Bitcoin faced a 3.6% drop, Ethereum 2.51%, and several altcoins experienced declines, triggering widespread liquidation of long positions. The incident coincides with geopolitical tensions in the Middle East and uncertainty post-halving, leading to fears of a potential crackdown on crypto privacy.

Department of Justice Arrests Samourai Wallet Founders, Triggering Cryptocurrency Market Dip

On April 24, 2023, the cryptocurrency market experienced a sharp decline following news of the arrest of the founders of Samourai Wallet, a popular privacy-focused cryptocurrency wallet service. The arrests, coupled with ongoing geopolitical tensions in the Middle East and post-Bitcoin halving volatility, contributed to a significant sell-off in major cryptocurrencies.

According to an official announcement by the United States Department of Justice (DOJ), Keonne Rodriguez, CEO of Samourai Wallet, and William Hill, the company's chief technology officer, were each charged with one count of conspiracy to commit money laundering and one count of conspiracy to operate an unlicensed money transmitting business.

Within an hour of the DOJ's announcement, the price of Bitcoin (BTC), the leading cryptocurrency by market capitalization, plummeted by 3.6%, falling below key support levels to $63,710. Despite a slight recovery, BTC remained below $65,000 as of the time of writing.

Ethereum (ETH), the second-largest cryptocurrency, also suffered a decline of 2.51% within the same timeframe. Unlike Bitcoin, ETH failed to rebound and continued to fall, reaching a price of $3,158.

Major altcoins, including PEPE (PEPE), Shiba Inu (SHIB), and Dogecoin (DOGE), also experienced significant losses. PEPE briefly dropped by 6.4%, SHIB declined by 2.7%, and DOGE fell by 3.2% following the news.

The precipitous price drops in the top two cryptocurrencies triggered widespread liquidation of long positions. According to data from CoinGlass, Bitcoin saw $33.08 million worth of long positions liquidated in the 12 hours following the DOJ announcement. Ethereum experienced $29.88 million in long position liquidations, while the rest of the crypto market saw approximately $23 million in long positions liquidated.

The cryptocurrency market decline coincided with escalating geopolitical tensions in the Middle East. On April 24, local reports indicated that the Israeli military had struck approximately 40 locations linked to Hezbollah in Southern Lebanon.

The crypto community, already anticipating short-term volatility following the Bitcoin halving event on April 20, expressed concern over the arrests of Samourai Wallet's founders. Some commentators viewed the arrests as a sign of increased government scrutiny and a potential crackdown on cryptocurrency privacy.

"These developers face up to 25 years in prison for writing code. The US is sending a message. No transaction will be private," tweeted crypto analyst Ryan Adams.

Fred Krueger, another crypto commentator, asserted that the arrests did not bode well for Bitcoin's overall reputation.

"Not a good look for Bitcoin in general," he wrote in a tweet.

Luke Mikic, a crypto commentator with a large social media following, emphasized the significance of the DOJ's actions against Samourai Wallet.

"This attack by the US Government on Samourai wallet is bigger than most people think," he stated in a tweet.

Despite the recent volatility and the concerns surrounding the Samourai Wallet arrests, the overall investor sentiment in the cryptocurrency market remains positive. The Fear and Greed Index, a measure of crypto market sentiment, rose to 72 this week, a significant increase from last week's score of 57.

It is important to note that cryptocurrency investments carry inherent risks, and investors should conduct thorough research before making any decisions. The information provided in this article is not intended as investment advice or a recommendation to buy or sell any cryptocurrency.