Samourai Wallet Founders Arrested and Charged With Money Laundering

Federal
prosecutors
charged
Samurai
Wallet
founders
Keonne
Rodriguez
and
William
Lonergan
Hill
with
conspiracy
to
commit
money
laundering
on
Wednesday,
as
the
U.S.
government
continues
its
approach
to
prosecuting
crypto
mixing
tools
that
may
be
used
by
illicit
actors
and
foreign
governments
to
hide
fund
transfers.

According
to

a
press
release
issued
Wednesday,
the
pair
developed,
marketed
and
operated
the
mixer,
which
“facilitated
more
than
$100
million
in
money
laundering
transactions
from
illegal
dark
web
markets.”

Samourai
overall
facilitated
around
$2
billion
in
“unlawful
transactions”
between
2015
and
the
present,
the
release
alleged.
An
accompanying
indictment
said
this
figure
was
calculated
by
converting
the
value
of
bitcoin
laundered
through
the
funds
to
U.S.
dollars,
based
on
bitcoin’s
price
“at
the
time
of
each
transaction.”

Rodriguez,
35,
and
Hill,
65,
collected
approximately
$4.5
million
in
fees
for
their
mixing
services,
according
to
prosecutors.
Different
features
had
different
pool
fees,
according
to
the
indictment.

The
pair
are
charged
with
conspiracy
to
commit
money
laundering
and
conspiracy
to
operate
an
unlicensed
money
transmitting
business.
The
charges
carry
a
maximum
sentence
of
20
years
and
five
years,
respectively.

Rodriguez
was
arrested
on
Wednesday
morning
and
will
be
arraigned
in
Pennsylvania
today
or
tomorrow,
according
to
the
press
release.
Hill,
Samourai
Wallet’s
CTO,
was
arrested
on
Wednesday
morning
in
Portugal
and
will
be
extradited
to
the
U.S.

The
Samourai
Wallet
website,
which
was
hosted
in
Iceland,
has
also
been
seized,
and
a
seizure
warrant
issued
for
Samourai’s
mobile
application
to
the
Google
Play
Store.

Samourai
has
been
in
development
since
2015,
the
DOJ
press
release
said,
and
Rodriguez
and
Hill
“encouraged
and
openly
invited
users
to
launder
criminal
proceeds”
through
the
mixer,
the
press
release
said,
citing
tweets
and
private
messages.
The
mobile
application
has
seen
more
than
100,000
downloads.

“At
Samourai
we
are
entirely
focused
on
the
censorship
resistance
and
black/grey
circular
economy,”
one
private
message
attributed
to
Hill
said.
“This
implies
no
foreseeable
mass
adoption,
although
black/grey
markets
have
already
started
to
expand
during
covid
and
will
continue
to
do
so
post-covid…”

The
pair
sought
investors
by
marketing
the
same
premise
–
that
“dark/grey
market
participants”
would
be
included
in
their
user
base,
the
release
said.
A
screenshot
from
marketing
materials
listed
“Restricted
Markets”
as
a
target
demographic,
alongside
online
gambling
and
asset
protection.

Wednesday’s
arrests
come
as
the
DOJ
prepares
for
its
upcoming
trial

against
Roman
Storm,
a
developer
and
co-founder
of
crypto
mixing
service
Tornado
Cash.
That
case
is
being
pursued
by
the
DOJ’s
Southern
District
of
New
York
division.
Recently,
the
DOJ’s
Washington,
D.C.
unit

successfully
won
a
conviction
against
Roman
Sterlingov,
the
operator
of
crypto
mixer
Bitcoin
Fog,
on
money
laundering
charges.

UPDATE
(April
24,
2024,
19:20
UTC):

Adds
additional
detail.

UPDATE
(April
24,
20:50
UTC):

Adds
screenshot,
additional
information.