The U.S. Department of Justice (DOJ) has charged Keonne Rodriguez and William Lonergan Hill, the founders of the cryptocurrency mixer Samourai Wallet, with running a large-scale money laundering operation. Their service executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets. Rodriguez and Hill were arrested on 24 April 2024.
Allegations of Extensive Criminal Activity
Keonne Rodriguez, aged 35, and William Lonergan Hill, aged 65, are alleged to have orchestrated a complex money laundering scheme leveraging their service, Samourai Wallet, which has reportedly facilitated over $100 million in transactions stemming from illegal activities, primarily on the dark web. The indictment suggests that since Samourai Wallet‘s inception in 2015, it has processed about $2 billion in potentially illicit transactions.
Further details from the DOJ press release indicate that the founders of Samourai Wallet explicitly promoted their platform as a facilitative tool for money laundering. Marketing materials and communications specifically targeted participants in the dark markets and online gambling sectors, underscoring the service’s appeal to those seeking anonymity for dubious financial activities.
Profits from Illicit Operations
The DOJ’s investigation revealed that Rodriguez and Hill accrued approximately $4.5 million in fees from these transactions, with the rates varying based on the features of the mixing service used. The charges leveled against them include conspiracy to commit money laundering and operating an unlicensed money-transmitting business, with Rodriguez facing up to 20 years and Hill up to five years in prison if convicted.
Founded by Keonne Rodriguez and William Hill, Katana Cryptographic, the wallet’s maker, received a $100,000 investment from Cypherpunk Holdings in 2019.
Coordinated International Arrests and Seizures
Both founders were arrested on the same day, with Rodriguez taken into custody in Pennsylvania, where he was scheduled for immediate arraignment. Hill was arrested in Portugal, pending extradition to the U.S. In conjunction with these arrests, authorities took aggressive steps to neutralize Samourai Wallet’s operations, including the seizure of their website hosted in Iceland and issuing a seizure warrant for the mobile application listed on the Google Play Store.
Broader Implications for the Crypto Industry
This case clearly indicates the U.S. government’s ongoing commitment to policing the digital financial landscape, especially services that offer enhanced privacy features that can be misused for illegal purposes. The action against Samourai Wallet‘s founders serves as a stark warning to other operators in the cryptocurrency space, emphasizing the need for compliance with financial regulations and anti-money laundering standards.
