Co-Founders of Crypto Mixing Service Arrested for Money Laundering
The co-founders of a crypto mixing service called Samourai Wallet have been arrested on charges of money laundering and operating an unlicensed money transmitting business. Prosecutors in the United States allege that the co-founders facilitated unlawful transactions totaling $2 billion through their platform.
According to the U.S. Attorney’s Office of the Southern District of New York, CEO Keonne Rodriguez and CTO William Lonergan Hill, who both played a role in developing Samourai Wallet, were apprehended on April 24, 2024. Rodriguez was arrested in the United States, while Hill was detained in Portugal, with the U.S. seeking his extradition.
Authorities have also seized Samourai’s domain and servers, and the app is no longer available for download in the United States. Prior to the seizure, the Samourai mobile app had amassed over 100,000 downloads.
The prosecutors allege that Samourai Wallet’s features, including a cryptocurrency mixer called Whirlpool and a hopping service called Ricochet, allowed criminals to obfuscate the source of their illicit funds. They claim that the defendants were aware that a significant portion of the funds processed by Samourai were obtained through criminal activities.
It is reported that Samourai facilitated more than $2 billion in unlawful transactions and laundered $100 million in crime proceeds from illegal dark web markets through its mixing and hopping services. The co-founders allegedly encouraged users to launder criminal proceeds and earned $4.5 million in fees from these activities.
Each co-founder is now facing charges of conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business. If convicted, they could face a maximum prison sentence of 20 years and five years, respectively.
The arrest of the Samourai Wallet co-founders is part of the U.S. government’s ongoing crackdown on crypto mixers, which are often used by criminals to launder money. Recent victories include the conviction of the operator of Bitcoin Fog and the sanctioning of other mixers like Tornado Cash and Blender.io.
Law enforcement officials are increasingly taking action against these platforms as they aim to disrupt the activities of notorious criminal groups, such as the Lazarus Group, and prevent the further proliferation of money laundering in the cryptocurrency industry.