Simply put
- Founders of Samurai Wallet, Keonne Rodriguez and William Lonergan Hill, have admitted guilt in operating unlicensed money transmission services, and their sentencing is upcoming this week.
- Prosecutors argue the pair solicited criminals on dark web platforms, with Rodriguez reportedly calling their services “Bitcoin money laundering” in private chats.
- Records indicate that at least $237 million was laundered using cryptocurrency mixers associated with their operation.
The U.S. government is pursuing the maximum penalty of five years in prison for both founders. They are accused of deliberately creating and promoting a cryptocurrency mixing service that allowed criminals to launder significant amounts of illegal funds.
In a sentencing memorandum submitted on Friday, prosecutors from the Southern District of New York stated that Rodriguez and Hill “repeatedly solicited, encouraged, and invited criminals” to utilize their platform to disguise illicit earnings.
This situation represents one of the more rigorous prosecutions of cryptocurrency developers by the government thus far.
Between 2015 and April 2024, when authorities halted the service, at least $237 million in criminal gains was identified as having passed through Samurai.
Rodriguez and Hill both accepted guilty pleas in July, acknowledging that criminals had used Samurai to launder proceeds from drug trafficking and hacking activities, conspiring to operate an unauthorized money transfer service tied to known illegal sources.
As part of the plea deal, prosecutors dismissed three additional charges: conspiracy for money laundering, conspiracy for violating sanctions, and operating without a federal license—each of which carries a potential 20-year sentence.
Rodriguez is set to be sentenced on November 6 at 11 a.m. ET, while Hill will face sentencing the following day.
Prosecutors contend that the duo actively sought out illegal users, labeling them as “not mere bystanders,” and promoted Samurai as a tool for laundering.
A government filing includes references to a 2018 WhatsApp conversation where Rodriguez spoke about mixing services, and in 2020 and 2023, Hill allegedly advertised Samurai on dark web forums with claims about “cleaning up dirty Bitcoin” to render it untraceable.
They reportedly generated over $6.3 million in fees (approximately 246.3 BTC) from Samurai transactions, now valued at around $26.9 million.
The filing suggests that criminal funds processed through Samurai originated from various dark web markets, including Silk Road and Hydra, as well as numerous crypto exchange hacks, sites involved in child sex abuse, murder-for-hire operations, and organizations under sanctions in places like Iran, Russia, and North Korea.
While the Probation Office recommended 42 months for each individual, prosecutors are pushing for the full five-year sentence, which is the maximum penalty under 18 U.S.C. 371 for the conspiracy charge.
This case underscores a broader trend where authorities are increasingly targeting mixers through regulatory and legal measures.
Recently, Tornado Cash developer Roman Storm faced a conviction for conspiracy, with jurors deadlocked on charges related to money laundering and sanctions evasion—those could potentially lead to retrials on charges regarding operating an unlicensed money transfer service.
In August 2022, Tornado Cash claimed that $7 billion had been laundered through its platform since 2019, frequently exploited by North Korean Lazarus Group hackers.
These earlier sanctions were later ruled illegal, and concerns have emerged among privacy advocates regarding whether creating open-source anonymity tools constitutes a criminal act.
