Feds Arrest Samourai Wallet Founders on Money Laundering Charges

The government alleges the founders knowingly facilitated $2 billion of unlawful transactions and the laundering of $100 million from Silk Road and other black market platforms.

By: Pedro Solimano Loading...

abstract symbols like handcuffs and digital wallets

The U.S. Department of Justice has charged the two founders of the popular privacy-focused Bitcoin wallet Samourai with facilitating money laundering and unlicensed money transmitting offenses.

The charges levied against both founders carry maximum sentences of 20 years and five years, respectively.

Keonne Rodriguez and William Lonergan Hill, the CEO and CTO of Samourai, are being charged with creating a wallet that executed $2 billion in unlawful transactions and knowingly facilitated the laundering of $100 million in assets from known black market platforms Silk Road and Hydra Market, according to a press release.

Both founders have also been charged with enabling a variety of other crimes, including wire fraud and computer fraud schemes, a web-server intrusion, a spearphishing scheme, and schemes to defraud multiple decentralized finance (DeFi) protocols.

U.S. authorities have seized the website, which is hosted in Iceland. Additionally, a seizure warrant for Samourai’s mobile wallet was served on the Google Play store.

Seizure Notice
Seizure Notice

“As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering,” said U.S. Attorney Damian Williams.

IRS-CI Special Agent in Charge Thomas Fattorusso added, “$2 billion in transactions with an unlicensed money transmitter means $2 billion flowed without any oversight, from whomever to wherever.”

Is Privacy A Crime?

The arrest triggered an outcry from the Bitcoin community, as claims that privacy is being outlawed by the U.S. government were voiced.

“This is an overreach of government against our civil liberties,” wrote Trevor Owens, general partner of the Bitcoin Frontier Fund. “We need everyone in the Bitcoin Ordinals community to help fight against this. Free Samourai Wallet.”

His concerns were echoed by Zack Voell, a seasoned crypto writer, who posted, “Privacy is a crime. That is the status quo.”

Ethereum developer and founder of privacy-focused portfolio app Rotki Lefteris Karapetsas added, “Offering the ability to preserve a user’s privacy in a completely public ledger is criminal activity now. If something has the potential of being used by a criminal entity, you as the software developer, are also liable?”

“What kind of dystopia is this?” he asked.