Federal prosecutors have charged the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill, with money laundering, marking a significant escalation in the U.S. government’s crackdown on cryptocurrency mixing services. The arrests have sent ripples through the crypto community, raising concerns about privacy and regulatory overreach.
The charges allege that Rodriguez, 35, and Hill, 65, operated and developed Samourai Wallet, a crypto mixing tool that facilitated over $100 million in money laundering transactions from illegal dark web markets. Furthermore, the wallet is accused of handling approximately $2 billion in unlawful transactions since its inception in 2015.
The indictment specifies that the pair collected approximately $4.5 million in fees from their services, with pool fees varying by feature. They are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years, and conspiracy to operate an unlicensed money transmitting business, which could add up to five more years if convicted.
Both founders have been arrested—Rodriguez in Pennsylvania, to be arraigned imminently, and Hill in Portugal, pending extradition to the U.S. In tandem with these actions, U.S. authorities have seized the Samourai Wallet website, hosted in Iceland, and issued a seizure warrant for its mobile application on the Google Play Store.
The Department of Justice (DOJ) press release included a statement from Hill that seems to underline the intent behind Samourai Wallet’s operations: “At Samourai we are entirely focused on the censorship resistance and black/grey circular economy,” emphasizing a deliberate focus on markets typically associated with illicit activities.
The case against the Samourai Wallet founders follows a string of government actions targeting cryptocurrency mixers, which anonymize crypto transactions making them difficult to trace. This crackdown includes the recent conviction of Roman Sterlingov, the operator of Bitcoin Fog, and the upcoming trial against Roman Storm, co-founder of Tornado Cash.
The arrest of Rodriguez and Hill has not only ignited a debate on privacy and the role of government in monitoring cryptocurrency transactions but has also caused immediate shockwaves in the crypto market. Bitcoin (BTC) and Ether (ETH) prices drop by 3.6% and 2.51%, with millions in long positions being liquidated in response to the news.
Relevant articles:
– Crypto Mixer Samourai Wallet’s Co-founders Arrested for Money Laundering, wsj.com, 04/27/2024
– Samourai Wallet founders arrested, crypto market tumbles, ReadWrite, Fri, 26 Apr 2024 13:10:54 GMT
– DOJ Arrests Bitcoin Wallet Founders Amid Cash-Like Privacy Concerns, Forbes, Fri, 26 Apr 2024 12:30:37 GMT
– Samourai Wallet Founders Arrested and Charged With Money Laundering, CoinDesk, Wed, 24 Apr 2024 19:10:00 GMT
– Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses, Department of Justice, Wed, 24 Apr 2024 14:22:26 GMT