US Prosecutors Push for Maximum Five-Year Sentence Against Samourai Wallet Founders

US Prosecutors Push for Maximum Five-Year Sentence Against Samourai Wallet Founders

Summary:
U.S. prosecutors are advocating for a maximum prison term of five years for the Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill. This stems from their alleged involvement in a crypto mixing service that facilitated the laundering of hundreds of millions in illegal funds. This case is part of a broader crackdown on privacy tools and developers in the cryptocurrency space.

Key Takeaways:

Prosecutors are seeking a maximum five-year sentence for the founders of Samourai Wallet.
Keonne Rodriguez and William Hill admitted to running an unlicensed money-transmitting business.
The case reflects the U.S. government's increasing scrutiny of crypto privacy technologies and developers.

In a memo submitted on Friday to the Southern District of New York, prosecutors stated that co-founders Keonne Rodriguez and William Lonergan Hill “repeatedly solicited, encouraged, and invited criminals” to use Samourai Wallet for concealing illicit funds.

Authorities assert that although the platform was advertised as a means of ensuring anonymity, it mainly served as a laundering tool for proceeds from drug trafficking, hacking, and other criminal activities.

U.S. Targets $237 Million Laundering Scheme in Crypto Privacy Crackdown

The government has estimated that Samourai Wallet facilitated the laundering of at least $237 million in criminal proceeds between 2015 and its closure in April 2024.

This case represents one of the most aggressive actions taken against cryptocurrency developers accused of enabling financial crimes through privacy-oriented technologies.

Rodriguez and Hill pleaded guilty in July to conspiracy charges for operating an unlicensed money transmitting service, acknowledging their awareness that the platform was being used for illegal transactions.

In return for their guilty plea, prosecutors dismissed three other serious charges—money laundering and sanctions violations—which could have led to sentences of up to 20 years each.

Rodriguez's sentencing is scheduled for November 6, followed by Hill's on November 7. While the probation office has recommended a 42-month sentence for each man, prosecutors are requesting the maximum five-year sentence permitted under 18 U.S.C. § 371.

This crackdown echoes the broader actions taken by the U.S. government against privacy tools within the crypto industry. In a related case, Tornado Cash developer Roman Storm was convicted earlier this year for running an unlicensed money transmitter, with allegations that over $7 billion of illicit funds, including money from North Korea's Lazarus Group, flowed through the service.

Despite parts of the sanctions being overturned, both cases have ignited discussions about the implications of criminalizing privacy-enhancing technologies.

Samourai Wallet Lawyers Accuse U.S. Prosecutors of Withholding Evidence

In May, legal representatives for Samourai Wallet co-founders Keonne Rodriguez and William Hill claimed that U.S. prosecutors withheld evidence that could potentially clear them of the charges.

In a letter addressed to a federal court in Manhattan on May 5, the defense team disclosed that officials from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) had informed prosecutors months prior to the charges being filed that Samourai Wallet did not require a money transmitter license.

Despite this guidance, prosecutors proceeded with the accusations against the founders for operating an unlicensed money transmission business.

The defense contends that the prosecutors failed to reveal FinCEN's advisory for nearly a year, only presenting it on April 1, 2025, thereby violating their legal obligations.

FinCEN officials reportedly determined that since Samourai Wallet is a non-custodial wallet that never held users' funds or private keys, it did not qualify as a money services business. Nonetheless, prosecutors continued to pursue charges, arguing instead that the platform had "functional control" over the assets, a stance that FinCEN had never formally supported.