The tech world is buzzing with news that Keonne Rodriguez and William Lonergan Hill, the founders of cryptocurrency mixer Samourai Wallet, have pled guilty to running a money transmitting operation that "washed" over $200 million for criminals. As reported by the U.S. Attorney's Office for the Southern District of New York, both Rodriguez, who served as the CEO, and Hill, the CTO of the company, admitted to their involvement in a scheme to aid and abet financial transactions related to various illegal activities including dark web markets and cybercrimes.
Samourai Wallet, which began development around 2015 according to the prosecution, offered tools to users aiming to obfuscate the source of their Bitcoin assets. The company’s "Whirlpool" service was specifically designed to mix batches of Bitcoin transactions, making it difficult, if not impossible, for law enforcement to trace the origins. The founders, realizing the gravity of their situation, have chosen to quickly and decisively plead guilty to charges on July 30, before U.S. District Judge Denise L. Cote, rather than to risk prolonging their case.
Nicolas Roos, the acting U.S. Attorney for the Southern District of New York, highlighted the importance of this case. "The defendants created and operated a cryptocurrency mixing service that they knew enabled criminals to wash millions in dirty money," he said, drawing attention to how such activities can tarnish the reputation of legitimate crypto companies. This sentiment was echoed by IRS-CI Special Agent in Charge, Harry T. Chavis, Jr., who emphasized that Rodriguez and Hill "did not just facilitate this illicit movement of money, but also encouraged it," as reporetd by the U.S. Attorney's Office.
The service provided by Samourai Wallet also included a feature named "Ricochet", which was designed to add extra transactions or “hops” between the sender and recipient, further complicating the tracking process. Documents and admissions from the court revealed that from the launch of Ricochet in 2017 and Whirlpool in 2019, over 80,000 Bitcoin went through these services, generating an estimated revenue of more than $6 million for Samourai based on the value of Bitcoin at the time of each transaction.
Both Rodriguez and Hill championed the illicit potential of their products on several fronts, including social media and darknet forums. In one incident detailed by the prosecution, they even went as far as to publicly encourage hackers from a high-profile social media hack to use their mixing services, a move that highlighted a brazen disregard for the law.
As a result of their guilty pleas, Rodriguez and Hill have agreed to forfeit a sum of $237,832,360.55. They each face a maximum sentence of five years in prison for their crimes, a penalty determined by Congressional mandate and the discretion of the presiding judge.
The success of this case is a product of collaboration between several international and federal agencies, including the Justice Department's Office of International Affairs, Europol, the Portuguese Judicial Police, and others. The prosecution is being handled by the Office’s Complex Frauds and Cybercrime Unit and Illicit Finance and Money Laundering Unit. Assistants U.S. Attorneys Andrew K. Chan, David R. Felton, and Cecilia Vogel are leading the charge.
