- Keonne Rodriguez, co-founder of Samourai Wallet, was sentenced to five years in prison for operating an unlicensed money transmitting business.
- Rodriguez and co-founder William Lonergan Hill pleaded guilty, avoiding longer sentences connected to money laundering charges.
- Rodriguez was also fined $250,000, and both founders are responsible for over $6 million in restitution to cover earnings from their unlawful activities.
- The Samourai Wallet offered privacy features that allegedly facilitated money laundering of stolen cryptocurrency.
- Hill’s sentencing is scheduled for November 19, 2023.
Keonne Rodriguez, co-founder of the mobile Bitcoin wallet Samourai Wallet, received a five-year prison sentence on November 2, 2023. The sentence is the maximum allowed by the judge after Rodriguez pleaded guilty to conspiracy to operate an unlicensed money transmitting business. His co-founder, William Lonergan Hill, will be sentenced later this month.
Rodriguez was also ordered to pay a $250,000 fine, and both men must provide more than $6 million in restitution, reflecting the earnings prosecutors attributed to their illegal operations, as stated by Rodriguez’s attorney Michael Krouse. Hill’s sentencing is set for November 19.
Launched in 2015, Samourai Wallet was a Bitcoin mobile wallet available on the Google Play store with over 100,000 downloads. The wallet’s privacy features, including ‘Ricochet’ and ‘Whirlpool’, were designed to enhance transaction Anonymity. ‘Ricochet’ routes Bitcoin transfers through additional wallets, while ‘Whirlpool’ mixes users’ coins to obscure transaction origins and destinations. According to court documents, more than $2 billion in Bitcoin flowed through these features, with about $250 million coming from hacks and scams.
Prosecutors argued that the wallet’s features enabled cybercriminals to launder stolen cryptocurrency. Private messages and online posts revealed the founders’ knowledge and promotion of their product’s ability to clean dirty Bitcoin. For example, a 2018 WhatsApp exchange showed Rodriguez defining “mixing” as “money laundering for Bitcoin.” Additionally, Hill recommended the Whirlpool service on a dark web forum for laundering Bitcoin.
The founders were charged with money laundering, which carries much longer prison terms, but pleaded guilty to operating an unlicensed money transmitting business. This charge limits their sentences to a maximum of five years.
Rodriguez’s attorneys had requested leniency, asking for a sentence of one year and one day, highlighting his work assisting victims of cryptocurrency theft. They represented him as a family man who never broke laws outside managing Samourai Wallet. Prosecutors, however, demanded the full five years due to the criminal scale of their operation and evidence that the founders encouraged illicit use.
The case is part of wider legal scrutiny on crypto privacy tools. Another example includes Roman Storm, co-founder of the Tornado Cash mixer, who faced similar charges but was convicted only on operating an unlicensed money transmitting business.
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