US Prosecutors Seek Maximum Sentence for Samourai Wallet Founders
Federal prosecutors are pushing for the maximum five-year prison sentence for Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill, alleging they deliberately built and marketed their cryptocurrency mixing service as a haven for criminal activity. The sentencing memorandum filed by the U.S. Attorney’s Office for the Southern District of New York represents one of the government’s most aggressive prosecutions of crypto developers to date.
The Criminal Allegations Against Samourai Wallet
According to court documents, prosecutors claim Rodriguez and Hill “repeatedly solicited, encouraged, and invited criminals” to use their platform to conceal illicit funds between 2015 and April 2024, when authorities shut down the service. The government identified at least $237 million in criminal proceeds laundered through Samourai during this period.
Dark Web Marketing and Criminal Solicitation
Prosecutors allege the founders actively courted illicit users, describing them as “not mere bystanders.” The government’s filing cites a 2018 WhatsApp chat where Rodriguez called their service “money laundering for bitcoin.” Court documents also reveal Hill allegedly promoted Samourai on dark web forums in 2020 and 2023, claiming it would be “cleaning dirty Bitcoin” and making it “untraceable.”
Financial Gains and Criminal Sources
The defendants collected over $6.3 million in fees from Samourai transactions, approximately 246.3 BTC, worth roughly $26.9 million today due to Bitcoin’s appreciation. Criminal proceeds traced through Samourai originated from multiple sources including darknet markets like Silk Road and Hydra, crypto exchange hacks, child sexual abuse material distribution sites, murder-for-hire plots, and sanctioned entities in Iran, Russia, and North Korea.
Legal Proceedings and Sentencing Details
Rodriguez and Hill pleaded guilty in July to conspiracy to operate an unlicensed money transmitting business involving funds known to be derived from criminal activity. In exchange for their pleas, prosecutors dropped three more serious charges: conspiracy to commit money laundering, conspiracy to commit sanctions violations, and federal licensing violations, each of the first two carrying potential 20-year sentences.
Sentencing Recommendations and Schedule
While the probation office recommended 42 months for each defendant, prosecutors are seeking the full five-year term, the maximum allowed under 18 U.S.C. § 371. Rodriguez’s sentencing is scheduled for November 6 at 11:00 a.m. ET, with Hill’s the following day.
Broader Context of Crypto Mixer Prosecutions
This case follows similar government actions against cryptocurrency mixers. In August, Tornado Cash developer Roman Storm was convicted of operating an unlicensed money transmitter, though jurors deadlocked on money laundering and sanctions evasion charges. The U.S. Treasury Department had previously sanctioned Tornado Cash in August 2022, claiming $7 billion had been laundered through the protocol since 2019.
Implications for Crypto Privacy Tools
The Samourai Wallet case raises significant questions about the legal boundaries of cryptocurrency privacy tools. Privacy advocates have expressed concern about whether building open-source anonymity tools itself constitutes criminal conduct. As regulatory scrutiny intensifies, this prosecution could set important precedents for developers working on privacy-enhancing technologies in the cryptocurrency space.
