The founders and CEO of Samourai Wallet, Keonne Rodriguez, and William Lonergan Hill, have been apprehended and charged with serious offenses related to money laundering and unlicensed money transmitting.
The money laundering charges stem from the alleged operation of Samourai Wallet as an unlicensed money-transmitting business, facilitating over $2 billion in illicit transactions and laundering more than $100 million in criminal proceeds.
Previously, Samourai Wallet was a prominent mobile Bitcoin wallet prioritizing user privacy and security. The crypto app was a popular choice among crypto users that aligns with Bitcoin’s core principles of decentralization, financial privacy, transparency, security, and fungibility.
Samourai Wallet Operator Arrest and Assets Seized
The announcement of the Samourai Wallet operator arrest was made jointly by Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (IRS-CI); and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI).
According to the indictment, Rodriguez and Hill were actively involved in developing, marketing, and operating the Samourai Wallet, which served as a conduit for illegal financial activities, including transactions originating from notorious dark web markets like Silk Road and Hydra Market.
Rodriguez was arrested in Pennsylvania, while Hill was apprehended in Portugal based on the charges filed in the United States. Efforts are underway to extradite Hill to face trial in the U.S. District Court. The case has been assigned to U.S. District Judge Richard M. Berman.
Rodriguez, 35, of Harmony, Pennsylvania, and Hill, 65, were charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business, carrying maximum sentences of 20 years and five years in prison, respectively.
The Crackdown of Samourai Wallet Operators
The crackdown on Samourai Wallet extends beyond the arrests of its operators. In collaboration with authorities in Iceland, the web servers and domain associated with Samourai Wallet were seized, along with a seizure warrant served on the Google Play Store, preventing further downloads of the Samourai mobile application in the United States.
U.S. Attorney Damian Williams emphasized the gravity of the allegations, stating that Rodriguez and Hill knowingly facilitated large-scale money laundering through Samourai Wallet, providing criminals with a platform to conceal the origins of illicit funds.
“Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns. Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct”, said Williams
According to the indictment, Rodriguez and Hill began developing the Samourai Wallet around 2015, offering users a mobile application for managing their cryptocurrency assets. The application, downloaded over 100,000 times, allowed users to store their private keys while employing centralized servers to facilitate transactions. Samourai Wallet offered features such as “Whirlpool,” a cryptocurrency mixing service, and “Ricochet,” which added unnecessary intermediate transactions to obscure the source of funds.
The indictment further alleges that Rodriguez and Hill actively promoted the Samourai Wallet as a tool for criminals to evade detection and launder money. Social media posts and marketing materials indicated their awareness of the illicit use of their platform, with references to servicing individuals engaged in criminal activities.
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