In short
- Samurai Wallet founders Keonne Rodriguez and William Lonergan Hill will be sentenced this week after pleading guilty to operating an unlicensed money transmitter.
- Prosecutors allege the defendants actively solicited criminals on dark web forums, with Rodriguez describing their service in private messages as “money laundering for bitcoin.”
- According to the filing, the government has determined that at least $237 million has been laundered through the crypto mixer.
The US government is seeking a statutory prison sentence of up to five years for both Samourai Wallet founders, alleging they deliberately built and marketed a crypto-mixing service as a haven for criminals to launder hundreds of millions of dollars in illicit proceeds.
In a sentencing memorandum submitted On Friday, prosecutors at the U.S. Attorney’s Office for the Southern District of New York said Keonne Rodriguez and William Lonergan Hill “repeatedly solicited, encouraged and invited criminals” to use their platform to hide illicit funds.
The case is one of the most aggressive government prosecutions of crypto developers to date.
Between 2015 and April 2024, when authorities suspended the service, the government identified at least $237 million in criminal proceeds laundered through Samourai, according to the filing.
Rodriguez and Hill pleaded guilty in July to a conspiracy to operate an unlicensed money-transmitting business involving money known to be derived from criminal activity, admitting that criminals used Samourai to launder drug trafficking and hacking proceeds.
In return, prosecutors dropped three more serious charges: conspiracy to commit money laundering, conspiracy to violate sanctions and federal licensing violations, with each of the first two carrying a penalty of up to 20 years in prison.
Rodriguez’s sentencing is scheduled for November 6 at 11 a.m. ET, with Hill’s the following day.
Prosecutors say the pair actively courted illegal users, calling them “not merely bystanders,” and claiming they were marketing Samourai for money laundering.
The government’s filing cites a 2018 WhatsApp chat in which Rodriguez called mix “money laundering for bitcoin.” In 2020 and 2023, Hill allegedly promoted Samourai on dark web forums by claiming it would “clean up dirty Bitcoin” and make it “untraceable.”
The defendants collected over $6.3 million in fees for Samourai transactions, approximately 246.3 BTC, which is worth approximately $26.9 million today due to Bitcoins valuation, according to the filing.
The criminal proceeds traced through Samourai came from darknet markets including Silk Road and Hydra, multiple crypto exchange hacks, child sex abuse distribution sites, assassination plots and sanctioned entities in Iran, Russia and North Korea, the filing states.
The probation office recommended 42 months for each defendant, but prosecutors are seeking the full five-year term, the maximum allowed under 18 USC § 371, which relates to conspiracy to operate an unlicensed money transmission business.
The case is a shadow of similar cases in which prosecutors and officials have targeted mixers with sanctions and regulatory pressure.
In August, Tornado Cash developer Roman Storm was there convicted of conspiracy to operate an unlicensed money transmitter, although jurors deadlocked on money laundering and sanctions evasion charges, potentially setting a new trial on these counts.
The United States Department of the Treasury sanctioned the mixer in August 2022, claiming that $7 billion had been laundered through the protocol since 2019, extensively used by North Korea’s Lazarus Group hackers.
Although these sanctions were later deemed illegal and cancelledthe criminal cases against both crypto mixer developers continued, express concerns among privacy advocates over whether building open-source anonymity tools is itself criminal behavior.
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