- Samourai Wallet founders pleaded guilty to operating an unlicensed money transmitting business.
- The defendants, William Lonergan Hill and Keonne Rodriguez, changed their pleas and now face up to five years in prison.
- The U.S. Department of Justice agreed to drop a money laundering charge, which carried a potential 20-year sentence, in exchange for the plea.
- Prosecutors claimed the platform laundered over $100 million in illicit funds through its Bitcoin mixing service.
- Sentencing for Hill and Rodriguez is scheduled for November 6.
William Lonergan Hill and Keonne Rodriguez, the developers behind Samourai Wallet, pleaded guilty on Wednesday to conspiracy to operate an unlicensed money transmitting business. The plea took place in a U.S. federal court, with both defendants facing a prison sentence of up to five years.
According to statements from the U.S. Department of Justice, the pair originally faced a more serious money laundering charge, which could have resulted in a sentence of up to 20 years. In exchange for their guilty plea, officials dropped the money laundering charge. The money transmitter charge—which now stands—is linked to the operation of a Bitcoin mixing service that helped users conceal their cryptocurrency transactions.
Prosecutors said that Samourai Wallet acted as a coin mixing app, allowing users to obscure the flow of funds on the blockchain. The Department of Justice and FBI closed the platform and arrested the founders last year, alleging that the service was widely used by criminals and that the operators had ignored its illicit use. The indictment stated, “while offering Samourai as a ‘privacy’ service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion.”
Recent court filings showed that Hill and Rodriguez, who had initially pleaded not guilty, formally changed their pleas this week. According to Amanda Tuminelli, chief legal council for the DeFi Education Fund, the government was able to get a conviction without the risk of losing at trial. She argued on X that the DOJ “misinterprets Section 1960 whenever they accuse a noncustodial software dev of ‘transferring funds on behalf of the public.'” Relevant DOJ guidelines outline the potential penalties for such offenses.
Coin mixers are applications designed to make it harder to trace cryptocurrency transactions, and have faced criticism for facilitating illegal activity. U.S. authorities shut down Tornado Cash—another privacy-focused protocol—in 2022, stating that criminals also used it to launder digital assets.
The court set sentencing for Hill and Rodriguez for November 6.
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