He is being penalized because of the privacy part, the prosecution argued that the sole purpose of and the intent behind the samurai wallet was money laundering (which he’s not actually being charged for nor was he ever. He was charged with a conspiracy to commit money laundering until that particular charge was dropped as a part of a plea deal) because he knew that it can be used by criminals. So he’s essentially being prosecuted for writing code that other people allegedly used to commit crimes, an equivalent of tor devs and relay operators being charged with a conspiracy to distribute CSAM and facilitate trade of illegal substances. He never held or controlled any funds yet he’s been charged for running an unlicensed money transmitting business despite finCEN explicitly stating that what he was doing did not qualify as transmitting money.

I can’t explain this nearly as well as the video does so please just watch if you have the time, it’s really interesting and there’s a lot of crazy, outrageous legal fuckery that the prosecution pulled. It’s worth a watch.