On July 30, Keonne Rodriguez and William Lonergan Hill, the co-founders of Samourai Wallet (“Samourai”), a cryptocurrency mixer that facilitated more than $200 million in illegal transactions, pleaded guilty before U.S. District Judge Denise L. Cote in New York. Rodriguez, the Chief Executive Officer of Samourai, and Hill, the Chief Technology Officer, pled guilty to participating in a conspiracy to operate a money transmitting business that transmitted crime proceeds from, among other things, illegal dark web markets, cyber intrusions, a spear phishing scheme, and schemes to defraud multiple decentralized finance protocols.
According to the government’s press release:
Beginning around 2015, the two defendants began developing Samourai, a mobile application that was designed and operated as a service for transmitting criminal proceeds. The defendants engineered Samourai around two services specifically intended to conceal the nature of illicit transactions. The first, a Bitcoin mixing service known as “Whirlpool,” coordinated batches of Bitcoin exchanges between groups of Samourai users. Through this process, the original source of particular Bitcoin holdings became obscured within the blockchain’s transactional record, effectively preventing law enforcement agencies and cryptocurrency exchanges from tracing funds back to their origins. The second service, called “Ricochet,” enabled users to introduce additional and unnecessary intermediate transactions—known as “hops”—between sending and receiving addresses. This feature served a similar obfuscation purpose, making it substantially more difficult for monitoring entities to establish connections between cryptocurrency transfers and potential illicit activities. The scale of these operations proved considerable: from Ricochet’s launch in 2017 and Whirlpool’s inception in 2019, more than 80,000 Bitcoin—valued at over $2 billion when calculated using contemporaneous exchange rates—passed through these services. Samourai collected a fee for both services, estimated to be over $6 million in revenue based on Bitcoin’s value at the time each fee was earned.
Rodriguez and Hill actively promoted Samourai’s utility for concealing criminal proceeds. Their communications reveal a clear understanding of Samourai’s illegal applications. In a WhatsApp exchange, when asked to explain the concept of “mixing,” RODRIGUEZ described the process as “money laundering for bitcoin.” HILL similarly marketed Samourai as a transmittal service for criminal proceeds on Dread, a darknet forum dedicated to discussing illegal marketplace activities. In one exchange on that platform, a user asked about the most “secure methods to clean dirty BTC” to make it “untraceable, clean” and ensure the user would “never get caught.” HILL responded by writing that “Samourai Whirlpool is a much better option” than a competitor service to “clean dirty BTC.” The defendant’s own marketing materials acknowledged that customers would include “Dark/Grey Market participants” moving proceeds from “illicit activity.”
Rodriguez, 36, of Harmony, Pennsylvania, and Hill, 67, a U.S. national who was arrested in Portugal, each pled guilty to one count of conspiracy to operate a money transmitting business knowing the business transmitted crime proceeds, which carries a maximum sentence of five years in prison. As part of their plea agreements with the Government, the defendants agreed to forfeit $237,832,360.55.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Read the full press release from the U.S. Attorney’s Office, Southern District of New York