U.S. prosecutors alleged that the two co-founders developed a cryptocurrency mining service called Samurai Wallet and made $2 billion worth of illegal transactions.
The co-founders have each been charged with money laundering and unauthorized money transfer operations, with the former facing up to 20 years in prison.
Samourai wallet is considered a “safe haven” for criminals
According to a press release from the U.S. Attorney's Office for the Southern District of New York, executives of Samurai Wallet CEO Keon Rodriguez and CTO William Lonergan Hill (both co-founders) will be arrested in April 2024. He was arrested on the 24th.
Mr. Rodriguez was arrested in the United States, and Mr. Hill was detained in Portugal, where a press release announced that the United States would seek his extradition.
Additionally, authorities seized Samurai's domain and servers, and the application is no longer available for download in the United States after a seizure warrant was issued on the Google Play Store. Before the seizure, the Samourai mobile app had more than 100,000 downloads.
Mr. Rodriguez and Mr. Hill developed and operated Samourai from 2015 to 2024. This included his two features: a crypto mixer called Whirlpool and a hopping service called Ricochet.
Prosecutors allege that both features helped obscure the source of criminal proceeds and served as a “safe haven” for criminals looking to launder illegal money. Prosecutors further argued that the defendants “intended and knew well that a significant portion of the funds processed by Samurai were the proceeds of crime that were routed through Samurai for the purpose of concealment.”
Through Whirlpool and Ricochet, Samourai reportedly conducted $2 billion worth of illegal transactions and laundered $100 million in criminal proceeds from illegal dark web markets.
Additionally, Rodriguez and Hill allegedly used Samourai to “encourage and openly invite users to launder the proceeds of crime” through tweets and private messages. As stated in the press release, the executives received $4.5 million in fees from Whirlpool and Ricochet.
US authorities step up crackdown on virtual currency mixers
Rodriguez and Hill are each charged with one count each of conspiracy to commit money laundering and conspiracy to operate an unauthorized money transfer business, each of which carries maximum sentences of 20 years and five years in prison.
According to a statement from FBI Assistant Director in Charge James Smith:
“Threat actors use technology to evade law enforcement detection and create environments conducive to criminal activity. For nearly a decade, Kionne Rodriguez and William Hill secretly contacted other criminals. He is said to have operated a mobile cryptocurrency mixing platform that provided a virtual currency haven for exchanging illegal funds.
The US government continues to crack down on cryptocurrency mixers believed to be used by notorious criminal elements such as the Lazarus Group to extract funds.
In March, federal prosecutors scored a victory against Roman Sterlingoff, the operator of cryptocurrency mixer Bitcoin Fog. Mr. Sterlingoff was convicted of charges related to money laundering.
Other crypto mixers such as Tornado Cash and Blender.io have previously been sanctioned by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), with executives of the former accused of laundering more than $1 billion. has been accused.
