Samourai Wallet Founders Face Sentencing in $237M Crypto Laundering Case

Between 2015 and April 2024, when authorities shut down Samourai Wallet, the U.S. government identified at least $237 million in criminal proceeds laundered through the crypto mixing service. According to court filings, the criminal funds originated from multiple darknet markets including Silk Road and Hydra, numerous cryptocurrency exchange hacks, child sexual abuse material distribution sites, murder-for-hire plots, and sanctioned entities in Iran, Russia, and North Korea. The scale and diversity of illicit sources demonstrate how extensively the service was utilized by criminal enterprises seeking to obscure their financial trails.

The founders, Keonne Rodriguez and William Lonergan Hill, collected over $6.3 million in fees from Samourai transactions, equivalent to approximately 246.3 Bitcoin. Due to Bitcoin’s significant appreciation since the transactions occurred, this amount is worth roughly $26.9 million today. This substantial financial gain underscores the commercial motivation behind operating the mixing service despite clear indications of its criminal use.

Prosecutors argue that Rodriguez and Hill were not passive observers but active participants in soliciting criminal business. The government’s sentencing memorandum cites a 2018 WhatsApp chat in which Rodriguez explicitly described mixing as ‘money laundering for bitcoin.’ This direct admission provides compelling evidence of the founders’ awareness of their service’s illicit applications and their willingness to embrace that market segment.

Further evidence shows Hill promoting Samourai on dark web forums in 2020 and 2023, claiming the service would be ‘cleaning dirty Bitcoin’ and making it ‘untraceable.’ These marketing efforts specifically targeted users seeking to conceal criminal proceeds, with prosecutors noting the defendants ‘repeatedly solicited, encouraged, and invited criminals’ to use their platform. The deliberate nature of this outreach forms a central pillar of the government’s case for maximum sentences.

In July, Rodriguez and Hill pleaded guilty to conspiracy to operate an unlicensed money transmitting business involving funds known to be derived from criminal activity. This strategic plea deal saw prosecutors drop three more serious charges: conspiracy to commit money laundering, conspiracy to commit sanctions violations, and federal licensing violations. The first two dropped charges each carried potential 20-year sentences, making the plea agreement a significant concession that limited the defendants’ maximum exposure.

Now facing sentencing, the defendants find themselves at the center of a dispute between government prosecutors and probation officials. While the probation office recommended 42-month sentences for each defendant, prosecutors are seeking the full five-year term—the maximum allowed under 18 U.S.C. § 371 for conspiracy to operate an unlicensed money-transmitting business. Rodriguez’s sentencing is scheduled for November 6, with Hill’s following the next day.

The Samourai Wallet case follows a similar pattern to the prosecution of Tornado Cash developer Roman Storm, who was convicted of conspiracy to operate an unlicensed money transmitter in August. In that case, jurors deadlocked on money laundering and sanctions evasion charges, potentially setting up a retrial on those counts. Both cases represent the U.S. government’s aggressive approach to regulating cryptocurrency mixing services through criminal prosecution rather than just regulatory action.

The U.S. Treasury Department had previously sanctioned Tornado Cash in August 2022, claiming $7 billion had been laundered through the protocol since 2019, with frequent use by North Korea’s Lazarus Group hackers. Although those sanctions were later deemed unlawful and lifted, the criminal cases against both crypto mixer developers proceeded. This legal landscape raises fundamental questions among privacy advocates about whether building open-source anonymity tools itself constitutes criminal conduct, or whether developers must demonstrate specific intent to facilitate illegal activity.