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Samurai Wallet Gets the Chop as Feds Twist the Knife

Today federal prosecutors brought charges against Keonne Rodriguez and William Lonergan Hill, founders of the Bitcoin wallet and mixer, Samurai Wallet, accusing them of conspiring to commit money laundering. This action reflects the U.S. government’s ongoing efforts to prosecute crypto protocols that could facilitate illicit activities and aid foreign entities in concealing financial transactions.

According to a press release issued on Wednesday, Rodriguez and Hill are alleged to have developed, promoted, and operated the mixer, enabling over $100 million in money laundering transactions from illicit dark web markets. The release further claims that Samurai Wallet facilitated approximately $2 billion in unlawful transactions between 2015 and the present. This figure was determined by converting the value of laundered bitcoins into U.S. dollars at the time of each transaction.

Prosecutors assert that Rodriguez, 35, and Hill, 65, received around $4.5 million in fees for their mixing services, with various features incurring different pool fees. The charges against them include conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business, carrying maximum sentences of 20 years and five years, respectively.

Founders Arrested

Rodriguez was arrested on Wednesday morning and is expected to be arraigned in Pennsylvania either today or tomorrow, while Hill, the Chief Technology Officer of Samourai Wallet, was arrested in Portugal and will be extradited to the U.S.

In addition to the arrests, the Samourai Wallet website, hosted in Iceland, has been seized, and a seizure warrant has been issued for the mobile application on the Google Play Store. The homepage of the website now displays a warning from U.S. officials following the charges against the developers.

The Department of Justice (DOJ) press release highlights that Rodriguez and Hill actively encouraged users to launder criminal proceeds through the mixer, referencing tweets and private messages. The mobile application reportedly garnered over 100,000 downloads.

The pair allegedly marketed their services to investors under the premise that participants in dark or gray markets would be among their user base. Marketing materials listed “Restricted Markets” alongside online gambling and asset protection as target demographics.

U.S. Attorney Damian Williams said: “As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering. Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns. Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct.”

FBI Assistant Director in Charge James Smith said: “Threat actors utilize technology to evade law enforcement detection and create environments conducive to criminal activity. For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering. The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”

These arrests coincide with the DOJ’s upcoming trial against Roman Storm, a developer and co-founder of crypto mixing service Tornado Cash, and the recent conviction of Roman Sterlingov, operator of crypto mixer Bitcoin Fog, on money laundering charges by the DOJ’s Washington, D.C. unit.

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