Quick Summary
- Samourai Wallet developers, Keonne Rodriguez and William Lonergan Hill, are facing a push from US prosecutors seeking a maximum five-year prison sentence.
- Prosecutors allege the developers intentionally created Samourai Wallet as a tool for criminals to launder illicit funds, citing a WhatsApp message where Rodriguez reportedly defined mixing as money laundering for BITCOIN.
- The defendants pleaded guilty to conspiracy charges and admitted that criminals used the platform to launder proceeds from drug trafficking and hacking.
- This case draws parallels to the conviction of Tornado Cash developer Roman Storm, who also faced charges related to operating an unlicensed money transmitter.
- Rodriguez’s sentencing is set for November 6, with Hill’s scheduled for the following day.
Samourai Wallet Developers Contest Prosecutors’ Sentencing Demand
Samourai Wallet developers, Keonne Rodriguez and William Lonergan Hill, are actively resisting a five-year prison sentence proposed by US prosecutors. This legal battle is characterized as one of the government’s most assertive prosecutions against cryptocurrency developers to date.
Prosecutors Allege Intentional Design for Criminal Use
US authorities are seeking the statutory maximum sentence of five years for both founders. They accuse Rodriguez and Hill of deliberately designing and promoting a crypto mixing service with the explicit intention of facilitating the laundering of hundreds of millions of dollars in illicit proceeds. Prosecutors claim the developers solicited and encouraged criminals to utilize the platform’s features to obscure their financial activities.
A sentencing memorandum filed on Friday highlighted a 2018 WhatsApp conversation where Rodriguez allegedly described mixing as money laundering for BITCOIN. The filing further states that the defendants profited over $6.3 million in fees from these illicit Samourai transactions, which are valued at approximately $26.9 million today due to Bitcoin’s appreciation.
In July, both Rodriguez and Hill entered guilty pleas to conspiracy charges. They acknowledged that individuals engaged in activities such as drug trafficking and hacking had indeed utilized Samourai Wallet to launder their criminal gains.
In exchange for their guilty pleas, prosecutors dropped more severe charges, including conspiracy to commit money laundering, conspiracy to commit sanctions violations, and federal licensing violations. Rodriguez is scheduled for sentencing on November 6 at 11:00 a.m. ET, followed by Hill the next day. The prosecution is advocating for the full five-year term, the maximum penalty under 18 U.S.C. § 371, which pertains to operating an unlicensed money-transmitting business.
Case Echoes Tornado Cash Developer Proceedings
The legal challenge faced by the Samourai Wallet founders shares similarities with the case of Tornado Cash developer Roman Storm, who was convicted in August for conspiracy to operate an unlicensed money transmitter. The US Treasury Department had previously sanctioned Tornado Cash in August 2022, but these sanctions were later invalidated, while the criminal proceedings continued.
Last month, Roman Storm petitioned a federal judge to dismiss his charges, arguing for a chance to clear his name. These charges carry a potential maximum prison sentence of five years. However, jurors were unable to reach a unanimous decision on the most serious charges: conspiracy to launder money and to evade sanctions, which together carry a combined maximum sentence of 40 years. Prosecutors are still deliberating on whether to retry Storm on these counts.
Storm’s legal team is seeking an acquittal on all three counts. They contend that the evidence presented during his three-week trial did not establish criminal intent and that the case should not have been tried in New York. If successful, this would not be the first instance where Storm’s lead attorney has persuaded a judge to overturn a jury’s verdict in a criminal trial.
Expert Summary
The legal proceedings against Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill are nearing their sentencing phase, with prosecutors pushing for the maximum five-year penalty. Their guilty pleas to conspiracy charges stem from allegations of intentionally creating a platform that facilitated criminal money laundering. This high-profile case continues to highlight the evolving legal landscape surrounding cryptocurrency mixers and developer accountability.