Simply put
- Samurai Wallet founders Keonne Rodriguez and William Lonergan Hill have pleaded guilty to operating unlicensed money transfer machines and will be sentenced this week.
- Prosecutors allege that the defendants actively solicited criminals on dark web forums, and that Rodriguez described his company’s services in private messages as “Bitcoin money laundering.”
- According to filings, the government identified at least $237 million laundered through cryptocurrency mixers.
The U.S. government is seeking the statutory maximum sentence of five years in prison for both Samurai Wallet founders, accusing them of intentionally building and selling a cryptocurrency mixing service as a haven for criminals to launder hundreds of millions of dollars in illegal proceeds.
In the sentencing memorandum submitted On Friday, prosecutors in the U.S. Attorney’s Office for the Southern District of New York said Kion Rodriguez and William Lonergan Hill “repeatedly solicited, encouraged and invited criminals” to use their platforms to conceal illegal funds.
This case is one of the most aggressive prosecutions of cryptocurrency developers by the government to date.
According to the filing, between 2015 and April 2024, when authorities suspended the service, the government identified at least $237 million in criminal proceeds laundered through Samourai.
rodriguez and hill pleaded guilty In July, criminals admitted using Samurai to launder drug trafficking and hacking proceeds, accusing them of conspiring to operate an unauthorized money transfer operation involving funds known to originate from criminal activity.
In exchange, prosecutors dropped three more felonies: money laundering conspiracy, sanctions violation conspiracy and federal license violation, the first two each carrying a potential 20 years in prison.
Rodriguez’s sentencing will be handed down on November 6 at 11 a.m. ET, and Hill’s sentencing is scheduled for the next day.
Prosecutors say the pair actively courted illegal users, calling them “not mere bystanders,” and promoting Samurai for laundering.
The government filing cites a 2018 WhatsApp chat in which Rodriguez made a phone call. mixture ‘Bitcoin Money Laundering’ In 2020 and 2023, Hill allegedly promoted Samurai on dark web forums, claiming it would “clean up dirty Bitcoin” and “make it untraceable.”
The defendants collected more than $6.3 million in fees (approximately 246.3 BTC) from Samurai transactions, which currently equates to approximately $26.9 million. Bitcoin’s According to the filing, we would like to express our gratitude.
According to the filing, the criminal proceeds traced through Samourai originated from darknet markets including Silk Road and Hydra, multiple crypto exchange hacks, child sex abuse distribution sites, murder-for-hire schemes, and sanctioned organizations in Iran, Russia, and North Korea.
The Probation Office recommended 42 months in prison for each defendant, but prosecutors are seeking a full five-year sentence, the maximum allowed under 18 U.S.C. 371, which covers conspiracy to operate an unauthorized money transfer business.
The case highlights similar cases in which prosecutors and authorities have targeted mixers through sanctions and regulatory pressure.
In August, Tornado Cash developer Roman Storm convicted of conspiracy Jurors deadlocked on charges of money laundering and sanctions evasion, which could be retried on charges related to operating an unlicensed money transmitter.
US Treasury authorized In August 2022, Mixer claimed that $7 billion had been laundered through this protocol since 2019 and was frequently used by North Korean Lazarus Group hackers.
These sanctions were later deemed illegal and lifted upcriminal proceedings against both crypto mixer developers proceed; cause concern Privacy advocates are debating whether building open source anonymity tools is itself a criminal act.
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