- Samourai founders face up to 25 years for laundering $100M using privacy tools Whirlpool and Ricochet.
- Prosecutors claim the wallet processed over $2 billion tied to darknet markets like Silk Road.
- Legal motions alleged withheld FinCEN evidence and DOJ overreach in targeting open-source crypto software.
The founders of Samourai Wallet, a privacy-focused Bitcoin wallet, have entered guilty pleas in a federal money laundering case involving over $100 million, as per the recently shared documents. Keonne Rodriguez and William Lonergan Hill changed their pleas during a court hearing held Wednesday before Judge Denise Cote in New York. They now face up to 25 years in prison. This development follows months of legal challenges as prosecutors targeted crypto tools that obscure transaction origins.
Founders Admit Guilt After Multiple Dismissal Attempts
Rodriguez and Hill were initially indicted in April 2024. They both denied wrongdoing and filed several motions to dismiss the charges. In June, their legal team cited a DOJ policy memo released on April 12, arguing that the case did not meet enforcement thresholds. They claimed the DOJ could not pursue developers over how their software was used by others.
Later, the defense submitted another motion, arguing that the prosecution withheld evidence from FinCEN. The withheld communication allegedly stated that Samourai Wallet was not legally required to register as a money transmitter. The Department of Justice maintained that the material did not have to be disclosed and opposed the motion.
DOJ Claims Samourai Processed Billions in Criminal Transactions
According to court documents, Samourai Wallet processed more than $2 billion in transactions tied to illegal activities. Prosecutors reported that over $100 million came from darknet platforms like Silk Road. The DOJ identified two key wallet features , Whirlpool and Ricochet, that were used to disguise the source of Bitcoin funds.
Internal messages and social media posts showed that the founders knew how the platform was being used. The DOJ cited those communications to support the claim that the platform was marketed for illegal purposes. Both features were designed to disrupt blockchain tracking, making funds difficult to trace.
Criminal Charges Could Set Legal Standard for Open-Source Crypto Projects
The charges include conspiracy to launder money, which carries a maximum sentence of 20 years, and operating an unlicensed money-transmitting business, which adds another five years. These developments follow similar actions against other crypto privacy platforms.
Tornado Cash co-founder Roman Storm is currently facing trial on related charges, including violating U.S. sanctions. His trial began in July in a Manhattan court. Prosecutors are taking a similar stance in that case, citing the tool’s use by illicit actors.
In a separate lawsuit, a blockchain developer accused the DOJ of overreach for targeting non-custodial crypto software creators. The outcome of both cases could influence how open-source crypto developers are treated under U.S. law moving forward.
