Samurai Wallet Gets the Chop as Feds Twist the Knife

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Federal prosecutors in the United States have filed charges against Keonne Rodriguez and William Lonergan Hill, the creators of Samurai Wallet, a Bitcoin wallet and mixing service. They are accused of plotting to launder money. This move underscores the US government’s determination to bring criminal proceedings against crypto platforms suspected of enabling illicit activities and helping foreign entities hide financial deals.

Based on a statement released on Wednesday, Rodriguez and Hill are accused of creating, advertising, and managing a mixer, allowing over $100 million worth of money laundering deals from illegal dark web markets to go through. Additionally, Samurai Wallet is said to have processed about $2 billion in unlawful transactions between 2015 and now. This amount was calculated by converting the value of laundered bitcoins into US dollars at the time each transaction took place.

Prosecutors claim that Rodriguez, aged 35, and Hill, aged 65, earned approximately $4.5 million in fees for their mixing services. Different features came with varying pool fees. The accusations against them involve allegations of money laundering conspiracy and running an unlicensed money-transmitting business. These offenses carry potential sentences of up to 20 years and five years, respectively.

Founders Arrested

On Wednesday morning, Rodriguez was taken into custody and may face charges in Pennsylvania as early as today or tomorrow. Meanwhile, Hill, who holds the position of CTO at Samourai Wallet, was apprehended in Portugal and is set to be transferred to the United States for further legal proceedings.

An additional development: The Samourai Wallet website, located in Iceland, has been taken over by authorities, and there’s a warrant for seizing the mobile app on the Google Play Store. A notice from American law enforcement now greets visitors to the wallet’s homepage following the developers’ accusations.

According to a statement from the Department of Justice (DOJ), Rodriguez and Hill allegedly urged people to clean their ill-gotten gains by using the mobile app. They provided evidence from social media posts and personal messages. The mixer, which has been downloaded more than 100,000 times, is said to be the platform for this money laundering activity.

The duo reportedly advertised their business to potential investors, claiming that people involved in illegal or unregulated markets would make up a significant portion of their customer base. Marketing materials mentioned “Prohibited Markets” alongside online gambling and asset protection as primary groups to attract.

According to U.S. Attorney Damian Williams, Keonne Rodriguez and William Lonergan Hill are accused of creating, advertising, and managing Samourai, a cryptocurrency mixing platform responsible for over $2 billion in illegal transactions. This service reportedly provided a safe space for criminals to launder more than $100 million worth of ill-gotten gains from various sources such as the Silk Road, Hydra Market, and multiple hacking and fraud schemes. In collaboration with our law enforcement allies, we remain committed to tracking down and dismantling criminal enterprises that exploit cryptocurrency to conceal their unlawful activities.

FBI Assistant Director in Charge James Smith said: “Threat actors utilize technology to evade law enforcement detection and create environments conducive to criminal activity.  For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering. The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”

The arrests take place concurrently with the Justice Department’s upcoming trial against Roman Storm, a cryptocurrency developer and co-founder of Tornado Cash, and the recent sentencing of Roman Sterlingov, Bitcoin Fog’s operator, for money laundering offenses by the Washington, D.C. branch of the DOJ.

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2024-04-25 05:54