Samourai Wallet Co-Founders Arrested on AML Charges

Samourai Wallet, has faced charges of money laundering brought by several organizations, including the United States Department of Justice (DOJ).

Several organizations, including the United States Department of Justice (DOJ), have brought charges of money laundering against the co-founders of the cryptocurrency mixer Samourai Wallet.

The allegations have led to the arrest of these individuals. There will be one count of conspiracy to commit money laundering, which carries a maximum sentence of twenty years in prison, and one count of conspiracy to operate an unlicensed money-transmitting business, which carries a maximum sentence of five years in prison.

Keonne Rodriguez, the chief executive officer of Samourai Wallet and William Hill, the chief technology officer, will face both of these charges. On the morning of April 24, authorities apprehended Rodriguez in Pennsylvania and they apprehended Hill in Portugal the same day.

The United States Attorney’s Office for the Southern District of New York issued a statement indicating that the United States will endeavor to secure Hill’s extradition.

Additionally, Iceland seized the company’s servers and domain, and issued a warrant to block the company’s applications from the Google Play Store. The application has received over 100,000 downloads.

U.S. Agencies Investigate Samourai Wallet

In addition, the Federal Bureau of Investigation and the Internal Revenue Service of the United States of America participated in the inquiry. According to the Department of Justice’s statement, Samourai Wallet offered its Whirlpool crypto mixing service and Ricochet service, leading to unnecessary transactions and further complicating its users’ crypto pathways.

“Executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets, such as Silk Road and Hydra Market; a web-server intrusion; a spearphishing scheme; and schemes to defraud multiple decentralized finance protocols.”

They claim that the fees generated $4.5 million for them.In recent years, the United States government has taken a more tough stance on cryptocurrency mixers.

Immediately following the hacking of Axie Infinity, the Office of Foreign Asset Control (OFAC) of the Treasury Department imposed sanctions against Blender.io in May 2022.

In October 2022, the Foreign Corrupt Practices Authority (OFAC) added addresses linked with the Tornado Cash mixer to its list of Specially Designated Nationals, essentially prohibiting residents of the United States from using the service.

The court upheld the decision despite a challenge. The court took custody of all three co-founders of Tornado Cash within the month of August 2023.

Immediately following the attack that Hamas carried out against Israel in October 2023, the Financial Crimes Enforcement Network of the Treasury issued a proposal to designate cryptocurrency mixers as a “primary money laundering concern.”