Executives of the cryptocurrency wallet Samourai indicted for money laundering

The CEO and CTO of cryptocurrency company Samourai Wallet, have been charged with conspiracy to commit money laundering and operate an unlicensed money transmitting business. They are accused of facilitating over $2 billion in unlawful transactions and over $100 million in money laundering from illegal dark web markets.

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Keonne Rodriguez and William Lonergan Hill, the CEO and CTO of cryptocurrency company Samourai Wallet, have been indicted and charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. The charges stem from their alleged involvement in the development, marketing, and operation of a cryptocurrency mixer that facilitated over $2 billion in unlawful transactions and enabled more than $100 million in money laundering activities from illegal dark web markets.

The indictment accuses Rodriguez and Hill of knowingly facilitating the laundering of criminal proceeds from sources such as Silk Road and Hydra Market, as well as from various wire fraud and computer fraud schemes, including a web-server intrusion and a spearphishing scheme. They are also alleged to have been involved in schemes to defraud multiple decentralized finance protocols.

Rodriguez was arrested and is expected to appear before a U.S. Magistrate Judge in the Western District of Pennsylvania, while Hill was arrested in Portugal, and the United States intends to seek his extradition for trial. In coordination with law enforcement authorities in Iceland, Samourai’s web servers and domain were seized, and a seizure warrant for Samourai’s mobile application was served on the Google Play Store. As a result, the application will no longer be available for download in the United States.

U.S. Attorney Damian Williams emphasized that Rodriguez and Hill are accused of operating a cryptocurrency mixing service that enabled criminals to engage in large-scale money laundering.

FBI Assistant Director in Charge James Smith explained that Rodriguez and Hill allegedly operated a mobile cryptocurrency mixing platform for almost a decade, providing a virtual haven for criminals to exchange illicit funds. Smith stated that Samourai’s services facilitated over $2 billion in illegal transactions and $100 million in dark web money laundering.

According to the indictment, from around 2015 to February 2024, Rodriguez and Hill developed, marketed, and operated the cryptocurrency mixing service known as Samourai. While promoting wallet as a “privacy” service, persecutors argue that the defendants were aware that it was used by criminals to launder large amounts of money and evade sanctions. The indictment alleged that Samourai processed over $100 million of criminal proceeds.

Illegal Samourai features

Samourai’s mobile application, allowed users to store their private keys for Bitcoin (BTC) addresses. Although Samourai employees did not have access to these private keys, the company operated a centralized server that facilitated transactions between users and created new BTC addresses. The indictment highlighted two features of Samourai that were allegedly designed to assist individuals engaged in criminal conduct to conceal the source of their proceeds. The first feature, called “Whirlpool,” was a cryptocurrency mixing service that coordinated batches of exchange between Samourai users to prevent law enforcement tracing on the Blockchain. The second feature, known as “Ricochet,” added unnecessary intermediate transactions, called “hops,” when transmitting cryptocurrency between addresses to prevent detection by law enforcement and cryptocurrency exchanges.

Over the years, over 80,000 BTC (worth over $2 billion at the relevant time) passed through these two services provided by Samourai. The defendants collected fees of approximately $3.4 million for Whirlpool transactions and $1.1 million for Ricochet transactions over the same period. Furthermore, Rodriguez and Hill operated Twitter accounts associated with Samourai.