The dramatic arrest of Samourai Wallet Bitcoin founders by the US Department of Justice has sparked shock in the crypto community.

On April 24, the cryptocurrency market experienced a brief tumble following the news of the arrest of Samourai Wallet Bitcoin founders by the United States Department of Justice (DOJ).

The arrest, which came amidst ongoing Middle East tensions and post-halving volatility, saw Bitcoin (BTC) and Ether (ETH) prices drop by 3.6% and 2.51%, respectively, within an hour of the announcement. Samourai Wallet CEO Keonne Rodriguez and chief technology officer William Hill each face one count of conspiracy to commit money laundering and one count of conspiracy to operate an unlicensed money transmitting business.

The news triggered a sharp decline in Bitcoin’s price, which dipped below key support levels to $63,710 before recovering slightly to $64,546. Ether, on the other hand, failed to bounce back and declined further to $3,158.

Major altcoins also experienced brief declines, with PEPE seeing a 6.4% drop, Shiba Inu (SHIB) experiencing a 2.7% decline, and Dogecoin (DOGE) briefly dipping 3.2%. The sharp price drops in the top two cryptocurrencies by market capitalization triggered widespread liquidation of long positions, Coinglass data shows Bitcoin seeing $33.08 million worth of long positions liquidated and Ether having $29.88 million liquidated in the last 12 hours.

The crypto community was largely anticipating some short-term volatility following the Bitcoin halving, which occurred just days earlier on April 20. Still, price action following the event was underwhelming and even the fees on the network fell.

An attack on privacy

Despite the fluctuations, overall investor sentiment in the crypto market remains positive, with the Fear & Greed Index showing a “greed” score of 72, a 15-point increase from the previous week. However, the crypto community has criticized the recent arrests, fearing it could be another attempt by the U.S. government to crack down on crypto, with some analysts and commentators expressing concerns about the potential impact on Bitcoin and the privacy of transactions.

The developers of Samourai were arrested this morning.

One extradited from Portugal.

Samourai is a bitcoin wallet that makes bitcoin private.

These developers face up to 25 yrs in prison for writing code.

The US is sending a message.

No transaction will be private. pic.twitter.com/GupLtMuHD8

— RYAN SΞAN ADAMS – rsa.eth 🦄 (@RyanSAdams) April 24, 2024