DOJ takes action against Samourai Wallet founders
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The US Department of Justice has arrested the CEO and CTO of Samourai Wallet, alleging that the company operated an unlicensed cryptocurrency mixing service that facilitated over $2 billion in unlawful transactions and laundered more than $100 million in criminal proceeds.
Keonne Rodriguez, the CEO, and William Lonergan Hill, the CTO and co-founder of Samourai Wallet, were arrested on Wednesday. Rodriguez was apprehended in the United States and is expected to face a judge either Wednesday or Thursday, while Hill was arrested in Portugal, with U.S. authorities seeking his extradition.
Founded in 2015, Samourai Wallet offered a series of privacy-enhancing features designed to obfuscate the source of funds. However, prosecutors allege that these tools enabled criminal activity, with the DOJ claiming that Samourai Wallet executed over $2 billion in transactions unlawfully and laundered more than $100 million in criminal proceeds. The DOJ stated:
“Samourai unlawfully combined multiple unique features to execute anonymous financial transactions valued at over $2 billion for its customers. While offering Samourai as a ‘privacy’ service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion.”
The DOJ further alleged that Hill and Rodriguez “intended” and knew that “a substantial portion of the funds that Samourai processed were criminal proceeds passed through Samourai for purposes of concealment.” The official account on X, formerly Twitter, was also accused of encouraging users to launder proceeds through the wallet.
Samourai’s web servers and domain were seized in coordination with law enforcement authorities in Iceland. At the time of writing, the domain leads to a page informing visitors that it was seized as part of a seizure warrant.
Rodriguez and Hill have been charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years, and one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years.
The arrests of Samourai Wallet’s founders represent the latest move by regulators against transaction mixing services and their developers. In 2022, the US government sanctioned Tornado Cash, an Ethereum-based transaction mixing service, with one of its developers, Alexey Pertsev, currently on trial in the Netherlands for his involvement.
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Author: Vince Dioquino
