Crypto market stumbles amid arrest of Samourai Wallet founders

The crypto market saw extra turbulence after Samourai Wallet’s CEO and chief technology officer faced legal action from the U.S. DOJ.

Bitcoin (BTC), Ether (ETH), and major altcoins briefly tumbled amid news of Samourai Wallet founders’ arrest by the United States Department of Justice (DOJ) on the backdrop of ongoing Middle East tensions and post-halving volatility. 

On April 24, Cointelegraph reported that cryptocurrency wallet Samourai Wallet CEO Keonne Rodriguez and chief technology officer William Hill will each face 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 announcement, Bitcoin’s price dropped 3.6%. Its price dipped below key support levels to $63,710, before recovering slightly to $64,546, as per CoinMarketCap data.

Meanwhile, Ethereum dropped 2.51% within the same time frame but failed to bounce back, declining further to $3,158.

The largest altcoins also took a hit, PEPE (PEPE) saw a brief 6.4% drop, Shiba I (SHIB) experienced a 2.7% decline, and Dogecoin (DOGE) briefly dipped 3.2% following the announcement.

The sharp price drops in the top two cryptocurrencies by market capitalization triggered widespread liquidation of long positions.

In the last 12 hours, Bitcoin saw $33.08 million worth of long positions liquidated, Ethereum had $29.88 million, and approximately $23 million in long positions were liquidated across the rest of the crypto market, as per CoinGlass data.

The crypto market decline also comes in the backdrop of geopolitical tension further escalating in the Middle East.

On April 24, the Israeli military struck approximately 40 locations linked to Hezbollah in Southern Lebanon, according to local reports.

The crypto community was already largely anticipating some short-term volatility following the Bitcoin halving event, which happened just days earlier on April 20.

Pseudonymous crypto trader Rekt Capital told his 456,400 X followers on April 24 that he predicts the next bull market peak not to occur until late 2025, approximately 546 days after the halving.

Related: Bitcoin analysts agree that BTC has ‘a lot further to run’

The fluctuations came despite overall positive investor sentiment in the crypto market.

According to the Fear and Greed Index, which measures crypto market sentiment, the greed score rose to 72 this week, a 15-point increase from last week.

The crypto community criticized the recent arrests, fearing it could be another attempt by the U.S. government to crack down harshly on crypto.

“These developers face up to 25 yrs in prison for writing code. The US is sending a message. No transaction will be private,” crypto analyst Ryan Adams stated in an April 24 post.

While Fred Krueger claimed on the same day in an X post that the arrest was “not a good look for Bitcoin in general.”

Crypto commentator Luke Mikic told his 26,800 X followers that this “attack by the US Government on Samourai wallet is bigger than most people think.”