On Wednesday, federal prosecutors brought charges against Keonne Rodriguez and William Lonergan Hill, the founders of Samurai Wallet, for their involvement in a money laundering conspiracy. This is part of the U.S. government’s ongoing efforts to prosecute tools used for crypto mixing, which might be utilized by unlawful entities and foreign powers to conceal financial transfers.
As per a press release issued on Wednesday, the duo developed, promoted, and managed the mixing service, facilitating over $100 million in money laundering transactions from illicit dark web markets.
Allegedly, Samourai was involved in approximately $2 billion in “illicit transactions” since 2015. An indictment mentioned that this amount was established by converting the bitcoin value transacted through the platform into U.S. dollars, using the bitcoin price “at the time of each transaction.”
Rodriguez, aged 35, and Hill, aged 65, garnered around $4.5 million in revenue for their mixing services, revealed prosecutors. Varying pool fees were charged for different functions, according to the indictment.
The duo faces charges of conspiring to commit money laundering and manage an unlicensed money transfer business. These offenses carry maximum penalties of 20 and 5 years, respectively.
Rodriguez was apprehended on Wednesday morning and is slated for arraignment in Pennsylvania either today or tomorrow, as per the press release. Hill, the CTO of Samourai Wallet, was detained in Portugal and is scheduled for extradition to the U.S.
The Samourai Wallet website, hosted in Iceland, has been seized, with a warrant issued for the confiscation of the Samourai mobile application from the Google Play Store.
Development of Samourai began in 2015, as per the DOJ press release, and Rodriguez and Hill purportedly “encouraged and welcomed users to launder illicit proceeds” using the mixing service, citing tweets and private messages. The mobile app has amassed over 100,000 downloads.
One private message attributed to Hill stated, “At Samourai we entirely focus on the resistance to censorship and the black/grey circular economy.” It was added that there are no plans for widespread adoption, although the black/grey markets have been expanding during and post-covid.
The pair solicited investors by promoting the idea that “dark/grey market participants” would use their service, as per the release. A screenshot from promotional materials featured “Restricted Markets” as a key target group, along with online gambling and asset protection.
These arrests coincide with the DOJ’s impending trial against Roman Storm, a developer and co-founder of Tornado Cash, a crypto mixing service. The case is being handled by the Southern District of New York. Additionally, the DOJ’s Washington, D.C. department recently secured a conviction against Roman Sterlingov, the operator of Bitcoin Fog, on money laundering offenses.
UPDATE (April 24, 2024, 19:20 UT): Incorporates more details.
UPDATE (April 24, 20:50 UT): Includes screenshot, additional information.
Source: www.coindesk.com