The co-founders of the cryptocurrency mixer Samourai Wallet have been apprehended on charges of money laundering filed by the United States Justice Department (DOJ) and other agencies.
Keonne Rodriguez, CEO of Samourai Wallet, and William Hill, the chief technology officer, are each accused of one count of conspiracy to commit money laundering, carrying a maximum sentence of 20 years in prison, and one count of conspiracy to operate an unlicensed money transmitting business, with a maximum sentence of five years in prison.
Rodriguez was taken into custody on April 24 in Pennsylvania, while Hill was arrested in Portugal on the same day. The United States intends to seek Hill’s extradition, as stated by the United States Attorney’s Office of the Southern District of New York.
Additionally, the company’s servers and domain were seized in Iceland, and a warrant has been issued to halt downloads of the company’s app from the Google Play Store, which has garnered over 100,000 downloads. The investigation involved the U.S. Internal Revenue Service and the Federal Bureau of Investigation.
According to the DOJ statement, Samourai Wallet was involved in executing over $2 billion in unlawful transactions and facilitating more than $100 million in money laundering transactions from illegal dark web markets such as Silk Road and Hydra Market. The accusations also include involvement in a web-server intrusion, a spearphishing scheme, and schemes to defraud multiple decentralized finance protocols.
Samourai Wallet provided services such as its Whirlpool crypto mixing service and Ricochet service, which generated additional, unnecessary transactions to obscure users’ crypto paths. Allegedly, the company generated $4.5 million from fees.
The U.S. government’s stance on crypto mixers has grown more stringent. Following the Axie Infinity hack, the Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned Blender.io in May 2022. Addresses associated with the Tornado Cash mixer were added to the list of Specially Designated Nationals in October 2022, effectively prohibiting U.S. residents from using the service. This decision was upheld after a court challenge. By August 2023, all three co-founders of Tornado Cash had been arrested.
In October 2023, the Treasury’s Financial Crimes Enforcement Network proposed designating crypto mixers as a “primary money laundering concern” following the Hamas attack on Israel.
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