Samourai mixer creators face 25 years in prison for conducting $2 billion worth of illegal transactions

What’s new? The US Justice Department has charged the founders of crypto mixer Samourai Wallet, Keonne Rodriguez, and William Lonergan Hill, with conspiracy to conduct business without a money transfer license and money laundering. The illicit transactions are estimated to be worth more than $2 billion and the laundered funds more than $100 million. The criminal proceeds flowed into the mixer from darknet marketplaces Silk Road and Hydra, as well as from DeFi protocol scammers, and hackers.

US Department of Justice statement

What else is known? US authorities seized Samourai’s web servers and domain in cooperation with Icelandic law enforcement and also issued a warrant against the crypto mixer’s app on the Google Play marketplace. As a result, it will no longer be available for download in the US.

Both defendants are founders of the crypto mixer, with 35-year-old Rodriguez serving as CEO and 65-year-old Hill serving as CTO. The charges relate to the development, promotion, and operation of Samourai. Rodriguez was arrested in the US and will appear in court in the Western District of Pennsylvania shortly. Hill was arrested in Portugal on US criminal charges and is awaiting an extradition decision.

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It is alleged that the defendants operated a cryptocurrency exchange platform for nearly 10 years, from 2015 through February 2024, that was promoted as confidential and used by criminals to secretly exchange illicit funds that the founders were aware of. In doing so, Rodriguez and Hill made millions of dollars in transaction fees.

Samourai is a non-custodial mobile application that allows users to single-handedly manage their private keys to BTC addresses. In doing so, they created a centralized server that controls and facilitates transactions between users, as well as creating new BTC addresses used in conducting them. Samourai has been downloaded over 100 000 times and has been used all over the world, including the US.

The service offered two main features: the Whirpool crypto mixer, launched in 2019, and a tool for making multiple intermediate transactions when sending cryptocurrencies from one address to another called Ricochet, launched in 2017. Over 80 000 bitcoins worth more than $2 billion (at the time of the transactions) have passed through these services since their launch, and they have brought in $3,4 million and $1,1 million in fees, respectively.

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Separately, the DOJ noted that Rodriguez and Hill openly invited users in their social networks to launder criminal proceeds. For example, they appealed to Russian oligarchs included in the sanctions lists and also refused to change the work of the service, commenting on the news that Europol called Samourai the main obstacle in tracking criminal proceeds.

The maximum penalty on both charges for each is 25 years in prison.