Samourai Wallet crypto mixer creator will be released on $3 million bail

What’s new? William Lonergan Hill, the co-founder and CTO of the Samourai Wallet crypto mixer, who was arrested in Portugal at the request of the US authorities, will be released on bail. After this, he intends to contest charges of conspiracy to conduct business without a money transfer license and money laundering, for which he faces up to 25 years in prison.

Case file

What else is known? In April of this year, US authorities charged Hill and his colleague and Samourai Wallet CEO Keonne Rodriguez with conducting more than $2 billion in illegal transactions and laundering more than $100 million.

The Justice Department also alleges that both earned millions of dollars in fees from transactions related to darknet marketplaces, scammers, and hackers. The US authorities seized Samourai’s web servers and domain and ordered it removed from the Google Play marketplace.

Hill’s lawyers said that US authorities have agreed to accept bail in assets worth at least $3 million, but disagree with the defense on the conditions of release. For example, defense lawyers argue that the 65-year-old developer should be allowed to stay in Portugal with his wife. Prosecutors believe Hill should stay in his native Brooklyn, at the address where his sister resides.

As for the charges, Hill denies them. The lawyer points out as one of the arguments that Samourai Wallet was available on Google Marketplace from May 2015 to April 2024. And if the mixer was designed as a money laundering service, then by the government’s own logic Google could be an accomplice, since it offered the app to nearly 4 billion Android users worldwide.

Also, the defense argues: the money laundering conspiracy charge is based on the accusation that Samourai Wallet did not have a license to transfer money. But this contradicts the Financial Crimes Enforcement Agency (FinCEN) guidance within the Treasury Department, current at the time. Thus, if Samourai Wallet was not a money transfer business, it had no obligation to prevent money laundering under the Bank Secrecy Act.

Also attached to the filing is a letter from Senators Cynthia Lummis and Ron Wyden to Attorney General Merrick Garland arguing that holding non-custodial cryptocurrency software developers criminally liable as unregistered money transfer businesses contradicts established interpretations of FinCEN guidance, leads to a stifling of innovation, and casts doubt on whether the DOJ respects the rule of law.

Hill is scheduled to make his first appearance in the US District Court for the Southern District of New York on July 9 or 10.

For his part, Rodriguez, who was arrested in the US, also denied the charges and was released on $1 million bail.