Samourai Wallet CEO Sentenced to Five Years for Operating Unlicensed Bitcoin Mixing Service

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Samourai Wallet CEO Sentenced to Five Years for Operating Unlicensed Bitcoin Mixing Service

A Samourai Wallet developer was sentenced Thursday to five years in prison for operating a crypto mixing service prosecutors say laundered $237 million in illicit funds. 

Keonne Rodriguez, the CEO of Samourai Wallet, received the statutory maximum from U.S. District Judge Denise Cote of the Southern District of New York, following an hour-long hearing in Manhattan, according to journalist Frank Corva.  

Fellow developer William Lonergan Hill, the company’s CTO, is scheduled to be sentenced Friday.

Rodriguez and Hill were arrested in April 2024 and charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. After over a year of litigation, both pled guilty to the lesser unlicensed money transmitting charge in exchange for prosecutors dropping the more serious money laundering conspiracy charge, which carries a maximum of 20 years in prison.

Samourai Wallet allegedly hid criminal activity

Prosecutors said the pair operated Samourai Wallet’s crypto mixing services, Whirlpool and Ricochet, to obscure the origins of criminal proceeds from drug trafficking, darknet marketplaces, cyber intrusions, fraud schemes, and murder-for-hire operations. 

Whirlpool coordinated batches of Bitcoin exchanges between users, while Ricochet introduced multiple intermediate transactions, or “hops,” to make tracing funds more difficult. From Ricochet’s 2017 launch and Whirlpool’s 2019 inception, more than 80,000 Bitcoin—  valued at over $2 billion at the time — passed through the services, generating over $6 million in fees.

Court documents reveal that Rodriguez and Hill actively encouraged criminal use of Samourai Wallet. In WhatsApp messages, Rodriguez described the service as “money laundering for bitcoin,” and Hill promoted Whirlpool on Dread, a darknet forum, as a tool to make illicit funds “untraceable.” 

Following a 2020 social media hack, the pair tracked stolen funds in real time and publicly urged hackers to launder the proceeds through Samourai Wallet.

The Department of Justice framed the case as part of a broader crackdown on cryptocurrency mixing services, following the August conviction of Tornado Cash co-founder Roman Storm for operating an unlicensed money transmitting business. 

Special agents from the IRS-Criminal Investigation and the FBI emphasized that Rodriguez and Hill not only facilitated but actively promoted laundering of illicit proceeds, undermining public trust in digital assets.

Rodriguez, 35, had requested a sentence of one year and a day, while Hill sought time served. Prosecutors had asked for the full five-year statutory maximum for both defendants, which Judge Cote imposed on Rodriguez. 

Hill’s sentencing is set for Friday at 11 a.m. ET.

This post Samourai Wallet CEO Sentenced to Five Years for Operating Unlicensed Bitcoin Mixing Service first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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