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.
