Federal prosecutors have charged two founders of the Samourai Wallet crypto-mixing service with aiding in the laundering of $100 million in proceeds from criminal activities.
Keonne Rodriguez and William Lonergan Hill face charges of participating in a money laundering conspiracy and operating an unlicensed money transmitting business from 2015 to February 2024.
According to an indictment unsealed in Manhattan on Wednesday, US prosecutors allege that during this period, Samourai facilitated $2 billion worth of anonymous financial transactions, serving as a platform for criminal activities such as money laundering and sanctions evasion.
Global regulators have been targeting crypto mixers, including Samourai, which aim to conceal the origins and destinations of transactions. In March, the founder of another mixing service, Bitcoin Fog, was convicted in Washington for aiding in the laundering of tens of millions of dollars from illicit darknet markets.
The indictment states that Samourai facilitated money laundering from illegal darkweb marketplaces like Silk Road and Hydra Market, as well as various computer fraud schemes.
Rodriguez, aged 35, was arrested in western Pennsylvania, with an expected appearance in federal court by Thursday, while Hill, aged 65, was apprehended in Portugal. The US authorities will seek Hill’s extradition.
Both Rodriguez and Hill served as executives at Samourai, with Rodriguez as the CEO and Hill as the CTO. Lawyers for the accused individuals have yet to be identified for comment on the charges, which carry a maximum penalty of 25 years in prison.
Samourai Wallet was promoted as a privacy tool with a global customer base, having allegedly been downloaded over 100,000 times.
The prosecutors allege that Rodriguez and Hill promoted Samourai’s ability to anonymize transactions through posts on Twitter (referred to as “X”). For instance, Rodriguez is said to have welcomed new users, including Russian oligarchs, in a post from 2022.
Authorities collaborated with Icelandic officials to seize Samourai’s web servers, and a warrant was served to Google to remove the application from the Google Play store.
Samourai employed services like “Whirlpool,” which facilitated crypto exchanges among users to prevent fund tracing, and “Ricochet,” which added extra intermediate transactions (hops) between the sender and receiver to obscure transactions, according to the government’s claims.
Samourai Wallet reportedly garnered $3.4 million in fees from Whirlpool and $1.1 million from Richochet.
In 2022, the UK’s National Crime Agency highlighted Samourai Wallet as a potential tool for illicit activities. This came after an earlier assessment by Europol, the European law enforcement agency, which categorized decentralized wallets like Samourai as a significant emerging threat.
According to a 2020 report from Europol, these wallets don’t necessarily sever the link between the origin and destination of funds, but they certainly complicate cryptocurrency tracing efforts.
The legal case is US v. Rodriguez, 24-cr-00082, in the US District Court for the Southern District of New York (Manhattan).
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