The quiet hum of the crypto world often masks a deeper tension, especially when privacy tools meet the long arm of the law. This week, that tension sharpened considerably for the founders of Samourai Wallet, Keonne Rodriguez and William Lonergan Hill. Prosecutors in the United States are pushing for a significant five-year prison term for each man.
- Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill face a potential five-year prison sentence each. Prosecutors allege the service facilitated hundreds of millions of dollars in illicit funds from criminal activities.
- The government claims at least $237 million in criminal proceeds, including from drug trafficking and darknet marketplaces, passed through Samourai Wallet. Hill admitted to inviting criminals to use the service to launder money.
- Both founders pleaded guilty to operating an unlicensed money transmitting business, a charge with a statutory maximum of 60 months. Their sentencing is scheduled for November 6 and 7, respectively, amidst a broader crackdown on crypto mixers.
It’s a serious request, outlined in a recent sentencing memorandum. The government alleges that Samourai Wallet, a service designed to obscure the origins of cryptocurrency transactions, became a massive conduit for illicit funds. We’re talking about hundreds of millions of dollars, they say, flowing from some truly dark corners of the internet.
For nearly a decade, from 2015 right up to April 2024, Rodriguez and Hill reportedly owned and operated this service. The filing from prosecutors paints a picture of a business deeply involved in money laundering. Rodriguez served as co-founder and CEO, while Hill took on the role of co-founder and CTO.
The numbers are stark. At least $237 million in criminal proceeds passed through Samourai, according to the filing. These funds allegedly came from a grim list of activities: drug trafficking, shadowy darknet marketplaces, cyber intrusions, various fraud schemes, and even murder-for-hire plots. One particularly disturbing mention involved a website for illicit material involving minors.
Adding to the weight of the accusations, Hill himself admitted something telling in his sentencing letter. He acknowledged inviting “computer hackers and other criminals” to use Samourai to clean up their ill-gotten gains. It’s a candid admission that certainly won’t make his upcoming sentencing any easier.
The Road to Sentencing
The legal journey for Rodriguez and Hill has been a winding one. The charges against them stemmed from a superseding indictment. It accused them of conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. These are not minor accusations, as anyone familiar with financial regulations will tell you.
On July 30, both founders entered separate plea agreements. They pleaded guilty to the charge of operating an unlicensed money transmitting business. This particular charge carries a statutory maximum sentence of 60 months, which is precisely five years. It’s why the prosecutors are asking for that specific term.
Now, the federal sentencing guidelines are a bit more complex. Prosecutors calculated an offense level of 35 for both men. Under these guidelines, that level usually corresponds to a much longer sentence, somewhere between 168 and 210 months. But the statutory maximum for the specific crime they pleaded guilty to caps it at 60 months. This is a key distinction, showing how legal frameworks can sometimes guide the final request.
Interestingly, not everyone agrees on the appropriate sentence. The Probation Office, for instance, recommended a shorter term: 42 months for each defendant. And the founders themselves have their own ideas. Rodriguez asked for a sentence of one year and one day. Hill, on the other hand, requested “time served,” meaning he believes he shouldn’t spend any more time in jail beyond what he’s already experienced since his arrest.
Both men were arrested on April 24, 2024. Their fate will be decided very soon. Rodriguez is scheduled for sentencing on November 6, with Hill’s hearing following on November 7. These dates will mark a significant moment, not just for them, but for the broader discussion around privacy in crypto.
A Wider Net for Mixers
The push for a five-year sentence for the Samourai Wallet founders isn’t happening in a vacuum. It reflects a clear and growing trend from U.S. prosecutors: a determined crackdown on crypto mixing and privacy services. It seems the authorities are drawing a line in the sand, or perhaps, in the blockchain.
We saw a similar story unfold recently with Roman Storm, a co-founder of the mixing service Tornado Cash. In August, a Manhattan jury found Storm guilty on one charge: operating an unlicensed money transmitter. The jury, however, couldn’t reach a verdict on the more severe money laundering and sanctions charges against him. It’s a nuanced outcome, but a conviction nonetheless.
That verdict sent ripples through the crypto community. Many advocates voiced strong objections, seeing it as a blow to privacy and open-source development. Even prominent organizations like the Ethereum Foundation and the Solana Policy Institute stepped up. They donated funds to aid Storm’s legal defense, showing a collective concern about the precedent being set.
As of today, Storm remains free on bail. His attorneys are actively pursuing a post-trial motion, hoping for an acquittal on all three charges. But if that motion doesn’t succeed, Storm could also face up to five years in prison for his money transmission conviction. It’s a stark reminder that these cases are not isolated incidents; they are part of a larger, coordinated effort.
The legal battles surrounding Samourai Wallet and Tornado Cash highlight a fundamental tension. On one side, there’s the desire for financial privacy, a core tenet for many in the crypto space. On the other, there’s the government’s mandate to prevent illicit activity and enforce financial regulations. How these two forces continue to clash will shape the future of privacy-focused tools in the digital asset landscape for years to come.
