Samourai Wallet Co-Founders Arrested on Money Laundering Charges
Summary:
The co-founders of cryptocurrency mixer Samourai Wallet, CEO Keonne Rodriguez and CTO William Hill, have been arrested on charges of money laundering by the U.S. Justice Department and other agencies. The duo are accused of operating an illicit money transmitting business and face prison sentences if convicted. The charges stem from allegations of conducting illegal transactions and laundering funds from dark web activities. The company's servers have been seized, their app downloads halted, and the U.S. authorities are seeking extradition of Hill from Portugal.
The United States Justice Department, along with other agencies, has taken into custody the co-founders of Samourai Wallet, a cryptocurrency mixer, on charges of money laundering. Keonne Rodriguez, the CEO of the company, and William Hill, its chief technology officer, have both been indicted with one count each of conspiracy to commit money laundering and conspiracy to operate an illicit money transmission business. If convicted, the former charge carries a maximum of 20 years imprisonment while the latter has a maximum penalty of five years jail time. On April 24, Rodriguez was apprehended in Pennsylvania while Hill was detained in Portugal. The U.S. Attorney’s Office of the Southern District of New York states that it plans to extradite Hill. The company's servers and domain, located in Iceland, have also been confiscated and they prohibited the download of their app on Google Play Store, which has exceeded 100,000 downloads. The investigation also included the participation of U.S. Internal Revenue Service and Federal Bureau of Investigation. As per the DOJ's announcement, the Samourai Wallet has conducted illegal transactions exceeding $2 billion and helped launder over $100 million from illicit dark web markets, including Silk Road and Hydra Market, a web-server invasion, a fraud spearphishing scheme, and strategies to swindle several decentralized finance protocols. The company provided services like Whirlpool, a crypto mixing service, and Ricochet that added unnecessary transactions creating more confusion in users' crypto transactions. These services allegedly earned them $4.5 million in fees. Additionally, the U.S. government has showcased increasing hostility towards crypto mixers. For instance, the Office of Foreign Asset Control (OFAC) under the Treasury Department sanctioned Blender.io post the hack of Axie Infinity in May 2022. In October 2022, OFAC added addresses connected with Tornado Cash mixer to the Specially Designated Nationals list, effectively barring U.S. residents from using the service – a decision that withstood a court appeal. By August 2023, Tornado Cash's three co-founders were all incarcerated. Then in October 2023, following the Hamas attack on Israel, the Treasury’s Financial Crimes Enforcement Network suggested labeling crypto mixers as a “primary money laundering concern".
Published At
4/25/2024 12:11:26 AM
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